Jordan Belfort: The Wolf Of Wall Street's Rise, Fall, And Comeback

Highlights

• Jordan Belfort, aka "The Wolf of Wall Street," made a significant impact on Wall Street with his ambition and ability to spot opportunities.
• Belfort's early life was modest, but he had a talent for sales and entrepreneurship, which eventually led him to establish his own firm, Stratton Oakmont.
• Stratton Oakmont engaged in fraudulent activities through pump and dump schemes, leading Belfort to serve prison time and pay millions in restitution. However, he has since rebuilt his life as a motivational speaker and author.

Wall Street has seen many prominent figures in its storied history, but few have left as much of a mark as Jordan Ross Belfort.

Belfort was aptly dubbed "The Wolf of Wall Street," for his unbridled ambition and unique ability to "smell blood" in the world of finance. His drive and his outsized persona led to a meteoric rise that brought him to the public's attention in the late eighties.

From his humble beginnings in the Bronx borough of New York City to helming a multi-million dollar firm (Stratton Oakmont), Jordan Belfort personified both the allure and the dark underbelly of Wall Street.

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Early Life

Born in the bustling borough of the Bronx and raised in Bayside, Queens, long before his exploits in Wall Street, Jordan Belfort's upbringing was modest. His early life was far from the glamour and notoriety that later defined him.

Belfort was first introduced to finance by his father, as both of his parents were accountants and stressed the value of education and responsibility. By the age of 14, he earned $20,000 selling Italian ice with a childhood friend.

Jordan went on to graduate from American University with a degree in biology and moved on to the University of Maryland School of Dentistry – but elected to drop out in his first year. Belfort ventured into the meat and seafood business, which was moderately successful, igniting the entrepreneurial spirit that would later define his Wall Street career.

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The business ultimately failed, and he filed for bankruptcy in 1987. Undeterred by the failed seafood business, he found a job as a trainee stockbroker at the now-defunct firm L.F. Rothschild.

Following the events of Black Monday, a global stock market crash that occurred on October 19, 1987, Belfort was laid off along with others in the firm. He took positions with other firms including D.H. Blair and F.D. Roberts Securities and Investors Center — the latter was a penny stock brokerage, shut down in 1989 by the U.S. Securities and Exchange Commission (SEC) one year after Belfort joined its staff.

Although Belfort's time at L.F. Rothschild was short-lived, it led him to realize he had a talent for sales, and he decided to make a name for himself by establishing his own firm: Stratton Oakmont.

Early Business Ventures And Stratton Oakmont

Jordan Belfort established Stratton Oakmont in 1989 as a penny stock brokerage house – which he went on to use to defraud investors with pump and dump schemes intended to artificially inflate the price of penny stocks (which is illegal).

Per Investopedia.com, a pump and dump scheme: " .... attempts to boost the price of a stock or security through fake recommendations. These recommendations are based on false, misleading, or greatly exaggerated statements. The perpetrators of a pump-and-dump scheme already have an established position in the company's stock and will sell their positions after the hype has led to a higher share price."

Belfort and his brokers were known for their aggressive sales tactics and willingness to bend the rules. At its peak, the firm reportedly had over a thousand stockbrokers managing investments worth over $1 billion.

Stratton Oakmont was also behind an initial public offering (IPO) that put footwear company Steven Madden on the map. Belfort also used Stratton Oakmont to launder money for drug cartels.

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Around the same time he began making serious money from his firm, he led a lavish lifestyle and became addicted to recreational drugs like methaqualone (Quaaludes) while engaging in gambling and philandering.

Fraudulent Activity And Prison

Throughout the history of Belfort's Stratton Oakmont, the National Association Securities Dealer (NASD) consistently pursued legal actions against the firm.

After a month of investigation, in April 1996 the New York District Business Conduct Committee barred Stratton Oakmont from conducting transactions for a year. In 1996, the Securities and Exchange Commission (SEC) charged Belfort and associate Danny Porush with money laundering and securities fraud.

Belfort pled guilty to fraud for the pump and dump schemes, which may have cost his investors as much as $200 million. He was sentenced to four years in prison.

Ultimately, he served 22 months. Belfort was ordered to restitution of $110 million to investors whom he defrauded during his pump and dump operations. After a few subsequent hearings, a judge changed the initial ruling and ordered him to pay a set amount of $10,000 a month.

Life After Prison

After serving his time in prison, Belfort faced an uphill battle to rebuild his life. He became a motivational speaker and authored a best-selling memoir, The Wolf of Wall Street, which was adapted into a blockbuster film in 2013 by Martin Scorsese.

Jordan Belfort also wrote Catching The Wolf Of Wall Street, which detailed his prosecution and prison time. As a motivational speaker, he held live seminars worldwide through his business, Global Motivation Inc.

His talks center on the distinction between greed, ambition, and passion on Wall Street. He runs "mastermind" investment courses, mainly focusing on cryptocurrencies, and corporate training focused on building effective sales teams.

Belfort's impact on Wall Street was undeniable. During his heyday, he soared to the highest financial heights, earning over $50 million a year.

Although Jordan Belfort succumbed to the temptation of fraud and the high octane Wall Street lifestyle – which resulted in a spectacular and widely-covered fall from grace – his well documented experiences serve as an invaluable lesson. After serving his time and learning from his mistakes, he has re-emerged as a globally recognized potent force, and a reminder that comebacks are possible.

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