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How Jordan Belfort defrauded investors through a pump-and-dump scam and created the "Wolf of Wall Street" myth
/THREAD/
How Jordan Belfort defrauded investors through a pump-and-dump scam and created the "Wolf of Wall Street" myth
/THREAD/
1/ Jordan Belfort was born in 1962 and raised by a middle-class family in Bayside Queens, New York.
He got his start as a door-to-door salesman for meat and seafood companies in Long Island.
He got his start as a door-to-door salesman for meat and seafood companies in Long Island.
2/ Despite his claims that his venture was successful and employed several workers, he filed for bankruptcy in 1987.
He was hired as a stockbroker trainee at L.F. Rothschild but was fired after the Black Monday crash in 1987.
He was hired as a stockbroker trainee at L.F. Rothschild but was fired after the Black Monday crash in 1987.
3/ He then proceeded to found Stratton Oakmont as a "boiler room" company for selling penny stocks and defrauding investors via pump-and-dump schemes.
4/ He used high-pressure sales tactics selling questionable investments via telephone presenting falsified or bolstered information about the companies.
He was promising enormous returns in a short period of time to his potential investors.
He was promising enormous returns in a short period of time to his potential investors.
5/ These small public companies had issued shares with prices less than a dollar and were trading over the counter since they were not being priced on the stock exchange trading floor.
6/ Stratton Oakmont became so successful that employed more than 1,000 stock brokers at one point, with a $1 billion trading volume.
7/ The most notable trade was taking Steve Madden's footwear company public via an Initial Public Offering (IPO).
Belfort had a controlling interest in the company via proxies, effectively promoting his own stock to unaware investors.
Belfort had a controlling interest in the company via proxies, effectively promoting his own stock to unaware investors.
8/ Belfort's lavish and bacchanalian lifestyle earned him a notorious status among Wall Street circles.
He and his firm, however, were under constant media scrutiny and criminal investigation by several federal agencies since the late 1980s.
He and his firm, however, were under constant media scrutiny and criminal investigation by several federal agencies since the late 1980s.
9/ Belfort was finally indicted charged with securities fraud and money laundering in 1996.
He served 22 months out of his 4-year sentence in prison in exchange for pleading guilty to the F.B.I. for his pump-and-dump scams that cost his investors more than $200 million.
He served 22 months out of his 4-year sentence in prison in exchange for pleading guilty to the F.B.I. for his pump-and-dump scams that cost his investors more than $200 million.
10/ Belfort was ordered to pay back more than $100 to his defrauded investors, in addition to 50% of his income until 2009.
11/ While in jail, he began writing his memoir titled "The Wolf of Wall Street"
It turned into a Hollywood film in 2013 starring Leonardo DiCaprio and Margot Robbie.
/END/
It turned into a Hollywood film in 2013 starring Leonardo DiCaprio and Margot Robbie.
/END/
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