Tuesday, 24 May 2016
Last updated 5 hours ago
Jun 12 2014 | 9:33am ET
A conservative talk-radio host from Texas must answer allegations that he defrauded investors in his hedge fund with the help of boiler-room operator Anastasios Belesis.
A federal judge in Washington rejected George Jarkesy’s argument that the Securities and Exchange Commission’s administrative process was unfair and that, in settling with Belesis, who in December accepted a one-year ban from the securities industry, it had prejudged him.
“To the extent that the plaintiffs believe their cause has been prejudged by the SEC commissioners, they may seek review, if necessary, before the court of appeals,” U.S. District Judge Beryl Howell wrote, but not before the SEC process had run its course.
The SEC has accused Jarkesy of lying to investors in his John Thomas Capital Management—now known as Patriot28; Belesis’ firm is called John Thomas Financial—about his role as the sole manager of its hedge funds. In fact, the regulator alleges, Jarkesy often abdicated those responsibilities to Belesis, who browbeat and bullied him into paying more in fees and investing in companies that John Thomas Financial had interests in. According to the SEC, Jarkesy’s funds paid Belesis’ firm nearly $5 million for “nearly inconsequential work.”