Found Guilty of Securities Fraud and Money Laundering
|Net Worth:||$ 100 Million|
|Source of Wealth:||Businessman|
|Born:||July 9, 1962|
|Birth Name:||Jordan Ross Belfort|
|Height:||5 ft 7 in (1.70m)|
Jordan Belfort ( AKA "The Wolf of Wall Street") is an entrepreneur who was found guilty of manipulating the stock market. He focused on penny stocks using the 'pump and dump' technique. His company, Stratton Oakmont, would buy shares in a company and then rave about a specific stock to investors, encouraging them to put money in. When the share price rose, Oakmont would sell its stake for a profit (sometimes 4-5x the price the bought at after just one month), and their salesmen would stop pushing the stock. The price would plummet, and investors would often lose their money.
Belfort served 22 months in prison for his crimes and has been publicly criticized for stealing the money of innocent investors and individuals. Penny stocks were targeted as they would have market caps of just a few million, making the share price easier to manipulate.
Belfort wrote two memoirs about his endeavors whilst imprisoned. His first, 'The Wolf of Wall Street', would go on to gross ~$400 million at the box office. The movie was directed by Martin Scorsese and the lead role was given to Leonardo DiCaprio. Belfort's second memoir, 'The Way of The Wolf', did not sell so well.
After he was released from prison, Belfort started work as a motivational speaker and began training sales teams. One of the key areas he focuses on is the difference between greed and ambition.
Jordan Belfort was born in 1962 and brought up in Queens, New York City. He was interested in business from an early age. In his book, he mentions working with his friend at an early age to sell Italian desserts. They sold them at the beach in styrofoam cones as they were low cost and prevented the desserts from melting in the summer months. This venture earned Belfort and his friend ~$20,000. During high school, Belfort wanted to become a dentist, so applied to university to study biology. His time at university did not last long; however, soon after dean told him the money-making days of dentistry are over, he left.
After leaving the university, Belfort started work as a door-to-door salesman in Long Island. He was exceptional at selling so his business grew rapidly. He quickly built a sales team to expand operations.
The team were selling seafood and meat, but when others saw his success, competition increased. Belfort's business collapsed when he was 25 and he went bankrupt.
After this failure, he wanted to go after the stock market. A family friend helped him learn the basics. In the 1980s, Belfort launched a new financial services firm called, Stratton Oakmont. The company was an "over-the-counter" stock brokerage.
The company made a good profit for several years and worked very well. There are dozens of companies and Stratton Oakmont was linked to the IPOs of these companies. During this time there were suspicions that things were going a little too well.
The company was thriving and Belfort started living a high life. He spent a lot of money on sports cars, mansions, and other expensive things. Additionally, Belfort was addicted to drugs; his favorite was Quaaludes. Due to his addiction, Belfort ran into trouble a lot. Some of these accidents included the crashing of a helicopter and sinking of his yacht (which he bought from Coco Chanel). The addiction also led to the breakup of the second marriage.
Crimes committed by Jordan Belfort
After launching his company, Belfort started getting involved in illegal activities, which would eventually lead to his incarceration. Stratton Oakmont was involved in multiple types of fraud, most notably, his pump and dump schemes. This related to the inflation of penny stock prices artificially. The company sales team would pressurize investors to buy into highly speculative securities. At its peak, Oakmont employed more than 1,000 people.
In 1992, the US Securities and Exchange Commission caught wind of the crimes committed by the company. They accused Oakmont of manipulating and inflating stock prices. Just two years, Belfort was forced to shut down his brokerage business. The company made a settlement with the SEC, and he was banned from the securities industry for life.
The National Association of Securities started taking legal action against the company in 1996. Belfort and his partner Danny Porush were arrested for committing securities fraud and money laundering. He was imprisoned for four years but served just 22 months.
Besides financial fraud, he was also involved in other crimes, including misdemeanors with his employees. One of the assistants of the company said that her head was shaved by some employees for $5,000.
Life after completing the tenure of imprisonment
After he was released from prison, he had to sign a restitution agreement and it was decided that 50% of his income will be used to repay investors. In 2013 a complaint was launched against him by Federal prosecutors because he has not been making payments.
Besides writing memoirs, Belfort established himself as a motivational speaker. His speeches generally revolve around sales.
"If you want to be rich, you must never give up. Most people will give up. If you have persistence then you will finish above most people. More importantly, you will learn. When you do something, you might fail. But that's not because you're a failure. It's because you have not learnt enough. Do it differently each time. One day, you will do it right. Failure is your best friend" - Jordan Belfort
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