Professionalism, Jordan Belfort and Stratton Oakmont

The story of Jordan Belfort and Stratton Oakmont became popularized when Martin Scorcese released his film The Wolf of Wall Street. The film depicted the revelrous behavior of Jordan Belfort, portrayed by Leonardo DiCaprio, and the other executives at Stratton Oakmont. While a life of sex, drugs, and parties made for a high grossing film, stealing money from unsuspecting clients should be at the epicenter of any discussion on Jordan Belfort, and the Wolf of Wall Street did not give this enough attention. Through his penny stock boiler room, Belfort stole over 200 million dollars from investors. Belfort's obsession with making money combined with no thought of long term sustainability led to this behavior. The ethical boundary was continuously being pushed to new limits as Belfort and Stratton Oakmont saw immediate monetary success resulting from their fraud. In the words of Belfort, "its easier to get rich quick when you don't follow the rules." [1]

Jordan Belfort

Jordan Belfort (Image: Ralph Zuranski, CC BY 2.0)

Stratton Oakmont fraud and conviction

Stratton Oakmont Inc. operated as a boiler room that sold penny stocks. It was founded by Jordan Belfort and Kenny Greene, and was later bought by Danny Porush. The company made millions illegally by defrauding its investors using a "pump and dump" operation. Belfort and several of his executives would artificially inflate a particular company's stock and then have an army of brokers sell it to unsuspecting investors. This would cause the stock to rise, guaranteeing Belfort and his associates a substantial profit. Soon, the stock would fall back to reality, with the investors bearing a significant loss. The brokers would follow a script that Belfort had written himself using high pressure sales tactics. They first would approach with a well known stock to gain the clients trust. Then once the client had created an account with Stratton Oakmont, the brokers would sell them an inflated stock. At its peak in the 1990s, the firm employed more than 1,000 brokers. The employees were urged to live by the motto, "Don't hang up until the customer buys or dies." Belfort personally took over $200,000,000 an estimated 1,513 investors, many of whom earn normal wages. For example, Dr. Alfred E. Vitt, a retired dentist, reportedly lost $250,000. Like Vitt, many other investors reported similar losses.[2]

The U.S. Securities and Exchange Commission learned of Stratton Oakmont's illegal actives and began investigating them in 1992. Two years later, the company reached a settlement with the SEC agreeing to a lifelong ban from working in the securities industry.3] Further legal trouble followed in 1996, when the [National Association of Securities Dealers ejected Stratton Oakmont from its association. The company was ordered to be liquidated and to off its fines and settlements the following year. Belfort pleaded guilty to securities fraud and money laundering. In 2003, he was sentenced to 4 years in prison and charged a $110 million fine. He only spent 22 months in jail and has yet to fully pay back his fine. Danial Porush, who took over Stratton after Belfort, was ordered to pay $200,425,851.31.[4]

Restitution

On July 8, 2003, Jordan Belfort was sentenced by John E. Gleeson to restitution of $110,362,993.87 at a rate 50% of his gross annual income plus interest. Upon his release from prison, he was to begin these payments and endure a three year supervised release period. As of October 4, 2013, he has paid $11, 629,143.64, 10.4 million of which were forfeited funds.5] According to a report from 2008, 362 of 3,378 former Stratton customers (not limited to just Belfort's clients) who have filed claims have received restitution after filing claims with the [Securities Investor Protection Corporation. Lorretta, E Lynch, United States Attorney of the Eastern District of New York, requested that Gleeson find Belfort in default of his restitution payments, due to his failure to pay his restitution at the mandated annual rate. This includes 2010, a year when he did not make any payments at all toward his restitution. Belfort and his attorneys argued that they were no longer bound to the 50% annual rate after the supervised release period.6] As of 2008, 362 of 3,378 former Stratton customers (not limited to just Belfort's clients) who have filed claims have received restitution after filing claims with the [Securities Investor Protection Corporation.[7] In October of 2013, federal prosecutors withdrew their default request to negotiate a new settlement with Belfort's lawyers. That year Belfort was also accused of illegally relocating to Australia to hide his assets; however, US attorneys retracted that accusation as well. [8]

Life After Prosecution

After being released from prison, Jordan Belfort wrote two books, The Wolf of Wall Street and Catching the Wolf of Wall Street, based on his life before prison. Red Granite, a Los Angeles based production company, purchased the rights for these titles from Belfort for $1,045,000 of which $250,000 went directly to restitution payments. The film, "The Wolf of Wall Street," was highly successful, grossing 66.1 million dollars in its first two weeks. Belfort adamantly claims that 100% of his income from the film will go to the Stratton victims. [9][10]

Belfort now travels the world as a motivational speaker. He teaches his "Straight Line Persuasion" technique, a technique modeled by his persuasion methods at Stratton Oakmont, to thousands of businesses; and in many of his talks, he emphasizes the importance of morals in business. He has worked with roughly 395 businesses, including Virgin America, Delta Airlines, and the Melbourne Storm, and offers three different speaking packages— 3-hour speeches, 3- day intensive training programs, and ongoing consultations. 11] Because of the [Privacy Act, 5 U.S.C. 552a, most of his financial records have been kept under seal by the government; however, many have estimated that he earns $30,000 per speech.[12] In a recent article, he said he makes "as much as fifty grand" for one of his speeches.[13] In addition to his in-person talks, he offers DVD, costing up to $1,997.00, to anybody wishing to learn his "Straight Line Persuasion" technique. [14] Belfort also has ownership in two companies: Wolf Holdings and Global Motivation. Jordan Belfort owns 50% of Global Motivation, which makes $110,000 in revenue annually. [15] [16]

Although many of his assets were forfeited to the government, Belfort’s new profession has allowed him to continue living an extravagant lifestyle. He is currently living in a 4,000 square foot beachfront home, estimated to be worth $3,593,724, in Hermosa Beach, CA. [17]

Public Perception

The Wolf of Wall Street made Jordan Belfort a celebrity in both a positive and negative light. On

Where this page came from

This page was imported from Wikibooks. From “Professionalism” on Wikibooks, by its contributors, under CC BY-SA 4.0. Changed here: set as a page; navigation and edit links left out; each image under its own licence, credited in its caption.

Nobody has written it yet — it is the source material at a new address, which is why search engines are asked to skip it and why no one earns from it. It is up for grabs: take it on, and it is yours to rewrite and to earn from.