SEC Charges Hedge Fund Manager and Brokerage CEO with Fraud

The SEC announced charges against a Houston-based hedge fund manager and his firm accused of defrauding investors in two hedge funds and steering bloated fees to a brokerage firm CEO who was also charged. According to the Order, George R. Jarkesy Jr., and his firm, John Thomas Capital Management (since renamed Patriot28 LLC), allegedly inflated valuations of the funds' assets, causing the value of investors' shares to be overstated, and the managers' fees to be increased. Further, according to the SEC, Jarkesy violated his fiduciary duties to the funds in multiple instances by providing excessive compensation to Thomas Belesis and John Thomas Financial.

Cross-Reference(s): Securities Act Section 17(a); Securities Exchange Act Section 10(b) and Rule 10b-5, Investment Advisers Act Sections 206(1), 206(2), 206(4) and Rule 206(4)-8.

View Order in full here (links externally to SEC website).See also: Press Release See also:the George Jarkesy home page.