The Wolf of Wall Street is a movie based on the real-life story of Jordan Belfort. Jordan Belfort was a stockbroker who operated a firm named Stratton Oakmont and generated a massive wealth through illegal and unethical means. In this article, we will dive into the story behind it.
Who is Jordan Belfort?
Jordan Ross Belfort is an American former stockbroker, financial criminal, and businessman who was found guilty of fraud and crimes in connection with stock-market manipulation as part of a penny-stock scam in 1999. He spent 22 months in jail for his criminal activities.
He used to sell meat (before joining L.F. Rothschild), door-to-door and seafood salesman on Long Island. But that business eventually failed. Then he joined as a trainee stockbroker at L.F. Rothschild, but he lost the job due to the ‘Black Monday’ stock market crash of 1987.
The Story
Jordan Belfort founded Stratton Oakmont, which functioned as a boiler room that marketed penny stocks and defrauded investors with ‘pump and dump’ stock sales. A boiler room is a room where salespeople work using unfair, dishonest sales tactics and sometimes selling penny stocks or private placements or committing outright stock fraud.
Jordan’s tactics and salesmanship largely contribute to the success of his ‘pump and dump’ scheme, in which misleading, positive statements inflate a stock’s price so it can be sold at an artificially high price. When the scheme’s perpetrators sold their overvalued securities, the price plummeted, and those who were trapped into buying at the inflated price were left with stock that was suddenly worth much less than they paid for it.
Soon, the firm made hefty profits, and the founders and the associated members indulged in a lavish lifestyle and drugs. Jordan illegally made $22 million in three hours after securing the IPO of Steve Madden, Ltd., which caught the attention of FBI agent Denham. He tried bribing him to settle the case, but he failed to. Sensing a danger, he opened an account in the Swish Bank by using another person’s name who had a European passport to smuggle the cash to Switzerland.
After the death of Emma (who helped Jordan extort the money into Europe), Jordan rushed to Switzerland to forge her name and save the funded account. He made several attempts, like bypassing border patrol, and tried fleeing through a plane, which was nothing but an unsuccessful event. Jordan took this as a sign and decided to give up his addiction to drugs.
However, he was found guilty by the FBI because of overwhelming evidence and a short note led to the arrest and shutdown of Jordan’s company, Stratton Oakmont. He was senteced to 36 months in prison, which was later reduced to 22 months, and he was released in 2000. After his release, Jordan made a living through hosting seminars on sales techniques.
Written by Satyajeet Mukherjee