If you’ve seen the popular 2013 movie, The Wolf Of Wall Street, you’ll probably have heard the name Jordan Belfort before.
But in case you’re still unaware, Jordan Belfort is an American author, motivational speaker, and former stockbroker, who, in 1999, plead guilty to fraud and related crimes in connection with stock-market manipulation and running a boiler room as part of a penny-stock scam. Belfort spent 22 months in prison as part of an agreement under which he gave testimony against numerous partners in his fraud scheme. The movie you know and love isn’t fiction, it’s mostly based on real events about Jordan’s life, and he even makes an appearance towards the end of the film.
Belfort was born in 1962 in the Bronx and was raised in Bayside, Queens. Between completing high school and starting college, Belfort and his close childhood friend Elliot earned around $20,000 selling Italian ice from styrofoam coolers to people at a local beach. Belfort went on to graduate from American University with a degree in biology. Belfort planned on using the money earned with Loewenstern to pay for dental school, and he enrolled at the University of Maryland School of Dentistry. He left after the dean of the school said to him on his first day: “The golden age of dentistry is over. If you’re here simply because you’re looking to make a lot of money, you’re in the wrong place.”
Future Ventures And Stratton Oakmont
Belfort became a door-to-door meat and seafood salesman in New York, and he claims in interviews and his memoirs that the business was an initial success, as he grew his meat-selling business to employ several workers and sold 5,000 pounds of beef and fish a week. The business ultimately failed, as he filed for bankruptcy at 25. According to his memoirs and interviews, a family friend helped him find a job as a trainee stockbroker at L.F. Rothschild. Belfort says he was laid off after that firm experienced financial difficulties related to the Black Monday stock market crash of 1987. (Where he was employed and eventually laid off at the start of the movie).
Jordan Belfort founded Stratton Oakmont in 1989 with Danny Porush and Brian Blake. Stratton quickly became the largest OTC firm in the country during the late 1980s and 1990s, responsible for the initial public offering of 35 companies, including footwear and fashion titan Steve Madden Ltd.
Their downfall began when they started operating pump-and-dump schemes, a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme “dump” their overvalued shares, the price falls and investors lose their money. Stratton Oakmont would also try to maintain the price of a stock by refusing to accept or process orders to sell the stock.
The firm was under near-constant scrutiny from the NASD from 1989 onward. Finally, in April 1996, the New York District Business Conduct Committee barred Stratton Oakmont from conducting principal retail transactions for a year. Stratton Oakmont appealed to the NASD National Business Conduct Committee. In December, the NBCC expelled Stratton Oakmont from the NASD, putting the firm out of business. They described Stratton Oakmont as “one of the worst actors” in the securities industry, with a history of “obvious disregard for all rules of fair practice.”
In 1999, Belfort and Porush were indicted for securities fraud and money laundering. They pleaded guilty and admitted that for seven years they operated a scheme in which they manipulated the stock of at least 34 companies. As part of their plea deal, they received less prison time, and cooperated with prosecutors in their investigations of other brokerage houses.
The total estimated revenue Stratton earned was around the £3,000,000,000 mark, with Belfort being forced to pay $110 million back as restitution.
Nowadays, Belfort runs seminars worldwide teaching sales and gives motivational talks, charging a pretty penny for an appearance. The main subject matter of his seminars is what he has called “Straight Line System”, a system of sales advice. Some reviewers have reacted negatively to the content of the speeches, specifically Belfort’s recounting of stories from the 1990s. Belfort was portrayed by Leonardo DiCaprio in The Wolf of Wall Street, a name given to him in the 90’s by Forbes magazine, who won the Golden Globe for Best Actor and was nominated for an Oscar for Best Actor for his performance.
