Wall Street CEO Charged With Fraud Was A Fox Regular Billed As Having “A Good Track Record”

Fox VP Cavuto On Thomas Belesis: “Friend,” “Good Track Record,” “I'd Vote For You”

Written by Eric Hananoki

Published

A Wall Street CEO charged with defrauding investors and physically threatening associates was a regular and favorite anti-regulation guest for Fox and the network's senior vice president, Neil Cavuto.

Fox News and Fox Business hosted John Thomas Financial founder and CEO Thomas Belesis 24 times in 2012 and January 2013. Fox ironically turned to Belesis to combat negative perceptions about Wall Street and push claims that government regulation is hurting businesses. Cavuto held up Belesis as an example of someone who defies the stereotype of “greedy, selfish pigs” on Wall Street, and called him a “friend,” someone with “a good track record,” and even encouraged him to run for office (“I'd vote for you”).  

Watch a video compilation of Cavuto's praise for Belesis: 

Fox Business has aired analysis from questionable voices in the past. Fox last month fired analyst Tobin Smith for receiving compensation to promote the stock of Petrosonic Energy, a violation of network policy. Fox Business contributor Charles Payne, who is still employed by Fox, was also paid to promote now worthless stocks, and previously “agreed to pay a civil penalty of $25,000” in 1999 to settle a Securities and Exchange Commission complaint.

This week, Belesis' John Thomas Financial ended its registration as a securities broker-dealer. The termination followed a tumultuous several months in which the SEC and an industry regulatory organization charged Belesis with defrauding investors. The SEC charged Belesis and his alleged fraud partner George Jarkesy in March with defrauding investors in two hedge funds. As Bloomberg explained of the SEC's charges: 

The two men, both 38, told investors the funds were independent from the brokerage then steered excessive fees to Belesis's New York-based firm, the SEC said yesterday in a statement. The regulator said it started administrative proceedings against Belesis, Jarkesy, who managed the funds, and their firms. They could face punishments including disgorgement and financial penalties, the SEC said.

Belesis worked with Jarkesy to raise two funds in 2007 and 2009, which peaked at $30 million under management, telling investors they would invest in microcap stocks, bridge loans and life-insurance policies, the SEC said. Jarkesy inflated the value of investments in disclosures and hired stock promoters to boost the price of shares, while Belesis and John Thomas Financial “willfully aided, abetted and caused” the hedge funds' violations, according to the regulator.

On April 15, 2013, The Financial Industry Regulatory Authority (FINRA), a private organization that acts as a regulator for securities firms, charged Belesis with “fraud in connection with the sale of America West Resources, Inc. (AWSR) common stock, intimidation of registered representatives, trading ahead, failing to provide best execution for customer orders and various other violations.”

FINRA further alleged that Belesis violated “FINRA's anti-intimidation rule by physically threatening (including threatening to have them 'run over'), harassing and assaulting registered representatives who have disagreed with Belesis' business practices, and threatening to ruin the registered representatives' financial careers by improperly marking their industry records.”

InvestmentNews reported in February that Belesis “has a scuff-marked history in the securities industry”:

S.W. Bach & Co. fired him in 2005 because of an “inaccurate representation of identity to customer,” according to Mr. Belesis' record on Finra's BrokerCheck system. In 2001, a client sued him and a firm where he had worked for $750,000 for churning. A Finra arbitration panel later awarded the client $259,000. Mr. Belesis and other firms he's worked for have settled two other Finra arbitration claims totaling nearly $100,000, Finra records show. He paid $46,000 as his share of the settlements.

In an interview with InvestmentNews in 2010, Mr. Belesis brushed aside the S.W. Bach firing, saying that the firm was essentially making a grab for the office of brokers he controlled. Like other brokers of that era, he blamed fallout from the tech market crash as provoking frivolous client lawsuits.

Bloomberg News reported in February that former Belesis employees “described a boiler-room atmosphere where they used high-pressure tactics to push stocks” and “trainees worked 14-hour days, mostly on their feet, reciting memorized sales pitches.”

Fox also hosted Jarkesy, who allegedly partnered with Belesis on a fraud scheme, at least eight times in 2012, according to a Nexis database search. Jarkesy's radio show biography states that he is a “frequent market commentator and guest on FOX Business News, FOX & Friends, and CNBC.” Like Belesis, Jarkesy's Fox appearances often railed against government regulation of business. During a June 28, 2011, appearance, Fox Business identified Jarkesy as a “successful money manager and investor” in a segment about how “government regulations are hurting America's businesses.”   

Belesis A Frequent And Favorite Guest For Fox Business

According to a search of the Nexis database, Media Matters' internal archives, and John Thomas Financial's website, Belesis appeared on Fox Business and Fox News at least 24 times in 2012 and January 2013. He appeared on Fox Business this year on January 28, but appears to have stopped making media appearances when news surfaced that he was being investigated for violations.

Belesis was also frequently on CNBC: The firm's YouTube page lists 10 Belesis appearances on various CNBC programs in 2012.

Belesis appeared most often on Neil Cavuto's Fox News and Fox Business programs. He also appeared on America Live, Fox & Friends, Power and Money, and After The Bell. 

Cavuto played up Belesis' credibility and resume during his Fox Business and Fox News segments:

  • During a segment on criticism of the financial sector, Cavuto introduced Belesis on July 12, 2012, by stating: “And trust me, he is a nice guy, he is a good guy, he is a decent guy.”
  • On August 16, Cavuto concluded a segment about stock picks by telling Belesis, “you've got a good track record, so we shall see.”
  • On August 29, Cavuto said he called Belesis a “gutsy guy,” “the voice of Wall Street, I like to call him” and “best dressed on Wall Street.”
  • On September 17, Cavuto concluded a segment with Belesis by stating, “Tom Belesis, thank you, my friend.”
  • On September 25, Cavuto told Belesis that Mitt Romney needs to deliver his message with “the same passion you just did” and added, “You should go into politics, you know. I don't know, you could run as a socialist. You could run as a communist. I'd vote for you because I'd just say, wow, you know. And you dress well. That is crucial.”

Ironically, Belesis was brought on by Fox to combat criticism of Wall Street ethics and complain about government regulation on business.

In a July 12 FBN interview, Cavuto combated criticism of Romney's financial sector ties and “those evil bankers and the filthy fat cats” by pointing to Belesis. Cavuto began the segment by stating of Belesis: “trust me, he is a nice guy, he is a good guy, the decent guy” and later asked him, “does it bother you on any level that the media pounces on the 25 percent financial support that Romney is getting and guys like you who are not nefarious characters and say nothing about the 25, a little bit more than that from the same sector that Barack Obama is getting?” Belesis replied by claiming Obama is waging “class warfare.”

During FBN's Republican National Convention coverage on August 29, 2012, Cavuto held up Belesis as someone who defies the stereotype of Wall Street as “greedy, selfish pigs.” 

On the November 8, 2012, edition of Cavuto, Belesis responded to a question about whether Wall Street money hurt Mitt Romney's electability by claiming it didn't since “if you're doing the right business, you're doing it in a way where it's not going to come out, you know, in a way like it did back in 2008, where a few banks put these crazy products together that really blew up the economy. You know, we're not in that type of business.” Belesis then transitioned into claiming that his own business was above the board:

BELESIS: I think the people that are doing the business the right way are not going to have any issues. As a matter of fact, you know, I just hired a chief risk officer from the SEC to come on board, to keep us intact with the new and up and coming regulations so that that way...

CAVUTO: That is actually very P.R. smart.

BELESIS: We did it because, you know what, that's the time that we're in right now and we have to be very smart about that.