We have all seen that movie. Of course, movies and their directors can take some liberties in the narrative even if it is based on the true story. You can’t deny that you can’t learn much about the world of business and financing without getting across some bad eggs in the basket.
So who was the so-called “Wolf of Wall Street”? Let us talk about the life of Jordan Belfort – his early career, his eventual descent into “pump and dump” schemes and his reformation.
It has been said that Jordan Belfort already had the potential to be a successful salesman. He was able to raise an incredible $20,000 on a small business with a friend. Jordan and this friend were selling Italian ice. However, taking a course in sales was not in young Jordan’s mind at that point because he was considering studying to become a dentist. He eventually graduated with a degree in biology.
Little is known online about his life before he joined L.F. Rotschild, where he learned stock brokerage. In the movie, he had a long conversation with Mark Hanna – who was played by Matthew McConaughey,– in which he is educated about how money circulates on Wall Street. Hanna even states they, the brokers, earn money through commissions from investors’ money. What they should do is keep the investors from cashing in and get them to reinvest that money to earn more commissions.
I’m still split between the thought that Martin Scorsese added that bit of writing into the movie and Belfort played along, since he has creative consultancy on the project.
After the stock market crash in the late 80s, Belfort lost his job at LF Rotschild. After some stints in between, he and some partners – including Danny Porush, who objected to being portrayed on film – started the brokerage Stratton Oakmont. Porush was replaced by a fictional character named Donny whom he met in an eatery – this account is tapped as “fictional” by most sources in the Internet, and Porush would probably agree.
The rest of the story is public, since Stratton Oakmont attracted the attention of the Securities and Exchange Commission and the FBI. The company held stocks from obscure companies that they then market aggressively through telemarketing. This aggressive pushing artificially inflated the stock prices until it got high enough for Stratton Oakmont to earn a considerable profit. They then “dump” the stock – they sell their holdings causing the price to plummet to the loss of the other investors they’ve convinced into buying.
Belfort and his employees, since they earned huge sums of profit from their boiler room tactics, engaged in an exorbitant lifestyle that involved drugs and lavish parties. At least the movie got that right.
After a lengthy investigation and trial, Jordan Belfort got convicted in 2003. He served 22 months out of the 48 months that he was sentenced to. After publishing his biographies and getting it translated into a Martin Scorsese movie, Belfort continued his salesman career by becoming a motivational speaker and providing financial training to people who want to earn money.
Hopefully, they don’t end up getting ideas like he did.