“Every sales organization has sales people of different caliber,” Kaufman said in a phone interview. “I’m sure that there are brokers at every firm that’s ever existed, including Goldman Sachs, that are fast talkers or seem like used-car salesmen.”
Pinkie Rings
Some other boiler rooms have crossed the line into fraud. Meyer Blinder, the Blinder Robinson & Co. founder known for his gold chains and diamond pinkie rings, pioneered techniques in the 1980s for cold-calling customers and enticing them with promises of stock tips later, according to a 2004 obituary in the New York Times. He served more than three years in prison for securities fraud.
“They believe it’s their money and it’s just out there for them to take it,” Phil Feigin, the former Colorado securities commissioner, said of Blinder and others he investigated. “The thrill was in the kill. It’s blood-curdling. They have no conscience.”
Stratton Oakmont Inc. was among the most notorious. Federal prosecutors said the brokerage generated millions in illicit profits by pushing penny stocks and manipulating their prices from its offices in Lake Success, New York, before it was shut down in 1996 by the National Association of Securities Dealers, a Finra predecessor.
Long Island
Belesis grew up about 10 miles away in the Long Island town of North Merrick. He started college and dropped out, Pitts said. In 1996, when Belesis was 21, he got into the stock business at the former Lew Lieberbaum & Co., Finra records show.
That time was “the height of the penny-stock Long Island craze,” said Danny Porush, one of Stratton’s founders who served about three years in prison for securities fraud. “The 20-year-old kids at Stratton were driving Ferraris.”
After working at S.W. Bach & Co. and Joseph Gunnar & Co. with his brothers George, 26, and John, 27, Belesis started John Thomas in 2007, according to Finra records. He named it after his grandparents, Pitts said.
Finra records show Belesis owns at least 75 percent of the brokerage, which has reaped about $108 million in commissions and fees since its founding. Revenue was $22.3 million for the 12 months ended May 31, a 26 percent drop from a year earlier, according to SEC filings.