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Exclusive: Secrets From The Sexist

Pitchbook Of One Of Wall Streets More


Notorious Firms
BuzzFeed has obtained the Golden Pitchbook used by top brokers
at John Thomas Financial. In its pages: How cold-calling brokers pressure
prospects to buy stocks from the troubled firm.

John Thomas Financial Inc. is a brokerage house straight out of the movie Boiler
Room, with brokers fueled by vending machines stocked with nothing but energy
drinks and music from Rocky films blaring from speakers. Its founder, Anastasios
Tommy Belesis, even had a role in the sequel to Wall Street.
Junior brokers cold-call prospects for up to 14 hours a day, working from a
memorized script that they rehearse by screaming pitches across the room to
each other before the opening bell, a former employee of the firm told BuzzFeed.
BuzzFeed obtained both that script, used by brokers of every level at the 200employee firm, as well as another script known internally as the Golden
Pitchbook, which is given only to a privileged few senior brokers at the firm.
Considered a performance reward for top brokers, the Golden Pitchbook is
handed down from their mentors at the firm who have also received the elusive
tome, the source said.
Its secret, privileged information, said the source. Some people at the firm dont
even know about it.
The books origins date to the 1980s at Bear Stearns, and it has gone through
various iterations on its journey into the hands of the lucky JTF broker who, after
impressing superiors, is walked down the street to a Kinkos, where senior brokers
supervise the books copying and hand-off.

Its a reward for senior brokers to give to junior brokers on their team as an
investment in them, the source said. Once they had it, they used it all the time.
The book offers a rare behind-the-scenes look into the world of high-pressure,
hard-scrabble Wall Street stock jockeying, featuring detailed scenarios and
responses used to pitch stocks to prospective clients.
The aggressive pitch tactics in the book and supporting JTF documents, such as
what one scenario described by the source as Dont Pitch The Bitch, have
caught the attention of the FBI, the Securities and Exchange Commission, and
the Financial Industry Regulatory Authority.
In March, the SEC charged Belisis with fraud for a hedge fund scheme in which
he steered bloated fees to JTF. A month later, Finra filed a formal complaint
against JTF regarding the firms actions in Februrary 2012, when it allegedly
pushed shares of America West Resources, Inc. (AWSR) common stock on
investors, thus inflating the price. Brokers at the firm also allegedly failed to
execute sale orders for clients in a timely manner but sold the majority of its
proprietary shares for a more than $1 million profit.
The firms alleged failure to execute at least 14 client sell orders lost investors
thousands, and America West is now in bankruptcy. In an even more outrageous
twist, the Finra complaint accuses Belesis of intimidating employees with threats
of maligning their broker records and, in one case, running over an employee with
his car.
Against that backdrop, here are some of the techniques outlined in the Golden
Pitchbook used by JTF brokers. The firms attorney, Robert Bursky, in February
told Bloomberg it did not use high-pressure tactics. He said at the time it doesnt
use scripts. Bursky did not respond to BuzzFeeds requests for comment.

Scenario #1: Speak to My Wife/Dont Pitch the Bitch


When a potential client (prospect) told a JTF broker he wanted to speak to his
wife before placing an order, the broker would offer a series of rebuttals designed
to pressure the prospect to buy immediately. According to a source familiar with
the firm, this method is referred to internally at JTF as Dont Pitch the Bitch, a bit
of industry jargon made famous in Boiler Room that discourages brokers from
making sales pitches to women and implores male prospects not to involve their
wives or girlfriends in stock-buying decisions.
(Prospect) if you want to call me back so you can ask your wife if you can buy
the stock, I will call my wife and see if I can sell you the stock, come on! You make
business decisions daily without your wife.
Lets face it, if you go home and tell your wife that you want to invest with a
broker whom you dont know very well, chances are you will be hit with a frying
pan and spending the night on the couch. However, once she sees my brochure
from the firm and a dossier that I send you in the FedEx package with a buy
confirmation, what do you think she is going to say? Besides, it is a lot easier to
beg for forgiveness than to ask for permission right?
Should I send it to your home where your wife will throw it out or to the office
where you will put it by your merchant banker book that you never read either?

Scenario #2: Not Interested/The Slap and


Hug
If a prospect told a JTF broker flat-out that he was not interested, the
broker would use a technique called the slap and hug to essentially
belittle the prospect before building him back up through kindness or
feigned concern. Brokers also used reverse technique, the hug and
slap, at times.

I have never in my life met anyone who wasnt interested in making


serious money. (Firm) is making more serious money for people than
anyone out there. It is not that you are not interested, something else
is bothering you. I am a problem solver. Perhaps if you tell me what
your actual concern is, I could help.

Scenario #3: The Long-Term Relationship


JTF brokers want prospects to know that they are in this thing for the
long haul, but they are definitely NOT gay.
Lets face it, your first step is the hardest. I am not looking for a one
night stand. You married your girlfriend right? Let me ask you a
question, you met your wife, but you did not jump into bed with her on
the first night did you? Of course not!! Maybe you held her hand or
maybe even kiss. Well look, I am not looking to jump into bed with you
or even get a kiss, I simply want you to hold my hand with 100 shares
and [in] 3-6 months you are gonna (sic) want to get into bed with me
quite frankly. I am not that guy [laugh]. So do the 100 shares not
because its good for me, but because it is good for you.

Scenario #4: This Company Is Going to Be


Bought Soon So You Need to Buy Now
To coax a reluctant prospect into buying immediately, the script
contains a boilerplate response scenario suggesting that whatever
stock the broker is pitching is about to get acquired, likely for a
premium.
More importantly, when I have timed it with a near term event I have
made a tremendous amount of money the event here is a possible
takeover. We are not buying this stock for earnings; we are buying it
for a takeover, which I feel is eminent.

Scenario #5: My Clients Are Rich and Smart,


Unlike You
And the more you invest with JTF, the better your chances of
becoming rich.
I want to say sincerely: I have many clients with net worths ranging
between $500K to $50 millionIf I could just show you what lies ahead
in the future and the types of deals I get involved with, I know you
would be very impressed.
My firm has turned the average investor into millionaires and the
millionaires into multi-millionaires. Not on one trade, but on a series of
3-4 transactions over a 1-2 year time frame.
Are you familiar with George Soros? This is the guy you want on your
side.Lets not let him make ALL the money!

Scenario #6: You Have Money, You Just Dont


Want to Give It to Me
A client claiming to not have money to invest is considered an insult, or
an outright lie. Literally.
No disrespect, but you telling me you are not liquid is an insult to both
you and me! A guy with (amount) in the market has a couple hundred
in the bank to back it up. There is always an excuse not to buy stock,
but there is never an excuse not to make money!
Guys like you dont ever let your bank accounts fall below 6 figures.
Its not that you cant do it, its that you wont do it. I am going to buy you
(shares) of (stock) at (price), money is due in one week but make me a
promise. When I am not just right but exactly right, next time out we
work in size and you send me 3 of your golfing buddiesOK?

(Prospect) if I offered you a Rolls Royce in min[t] condition today for


$10,000 could you come up with the money? OF COURSE YOU COULD!!
Lets be candid, if you like my idea today, you could come up with ten
times that amount.

Scenario #7: Trust Us, We Did the Research for


You
The script takes pains to instruct brokers in ways to avoid sending
additional information requested by the client on the stock being
pitched.
By the time you get information or research reports, you are buying
the stock 5 points higher. The way to make money in this business is to
buy in to fundamentally sound companies that are timed with near
term events or catalysts. With this approach I have made a fortune for
a select group of individuals.
Ok (prospect) Fine! I have no problem with that, but let me ask you
something first, correct me if I am wrong. What youre telling me is
that if I send you the information you want about the company and it
mentions the merits I described, that you will open an account? (NO)
Then obviously (prospect) the request for information is not your real
concern.

Scenario #8: Buy Now or You Will Miss Out


Please understand, the secret of our program is matching timing
opportunity. If we thought next month was the time to buy, I would not
be calling you today. I would be calling you next month. You need to
understand what we are doing here. I can appreciate now may be a
bad time, but unfortunately the market is not going to wait for you.
Lets be honest, when I call you back you will ask me to call you back
again, then it will be tax time. To make exceptional returns, you must
but on value and at the right timing. You know what sir? Your worst

nightmare is to work with a broker who brings you a winning situation


and is willing to play phone and mail tag with you. We both dont have
time for it. The reason my clients retain a broker like myself is for my
exact pricing and timing. Without these 2 tools, you are tying my hands
behind my back I may as well work at Charles Schwab.

Bonus Scenario: Misusing the Term Fiduciary


One response in the pitchbook says that JTF brokers have a fiduciary
responsibility to call back individuals whom they have spoken to.
The use of the term fiduciary responsibility is problematic in that it
grossly misstates the brokers professional standards of conduct when
it comes to the relationship with a prospect. By law, the SEC does not
require brokers to have a fiduciary duty to their clients, only financial
advisers.
In fact, the commission has been pushing to change the laws pertaining
to financial services professionals and their fiduciary responsibility to
their clients, and has evenacknowledged that investors are confused by
the level of fiduciary responsibility their financial planning professional
has to them.
The SEC has formally recommended a rule that would implement a
uniform fiduciary standard of conduct for broker-dealers and
investment advisers when providing personalized investment advice
about securities to retail customers.
Like, say, customers who may have just bought the next America West
from a broker at John Thomas Financial.