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The Making of the Wolf of the Wall Street
“Making money is so easy,” Jordan Belfort claimed in an interview with New York magazine in 2013, as he sat in his mini-mansion in Manhattan beach, bought with (allegedly) fraudulent money.
It could be said that Belfort always had money as his priority, though he had many incidents that many would consider failures. At 22, he dropped out of dental school during the first day when the dean acclaimed that the “golden age of dentistry was over,” and money could not be sought through this profession. Proving his hasty nature, Belfort later started a career as a salesman but was not successful and ended up facing bankruptcy at the mere age of 25. During the midst of this unpredictable time, his family came in to help him, and he started to work as a stockbroker. This legal foundation gave him a base to acquire practical skills that would later aid him in going around the law. Bad luck, however, followed him to Manhattan as well; Belfort lost his job at the firm after the financial crisis his company faced following the stock market crash of 1987.
Tired of the instability of working for others, Belfort became an entrepreneur and started a brokerage with Danny Porush as his partner. His reputation was only improving as days passed. The business quickly became a success, and started to make millions soon enough. But, with money and fame came great responsibility.
Stratton Oakmont, Belfort’s brokerage house, was under provision by the Securities and Exchange Commission (SEC) for artificially inflating stock. This meant that he and his partner were making a great amount of money through inflating unregulated penny stocks and adding a service fee during sales. Alongside doubts by the SEC, Stratton Oakmont was also under watch by the National Association of Securities Dealers (NASD). In 1994, Belfort reached an agreement with the SEC that banned him from the securities industry for life, although he continued to work secretly with his partner under the table.
Amidst the whispering in the industry, Belfort was arrested on September 2, 1998 for conspiracy to commit money laundering and securities fraud that caused more than a thousand investors losing over $200 million. In 1999, Belfort and his partner, Danny Porush, were indicted for money laundering and securities fraud by the NASD.
United States v. Belfort
In 1998, co-defendants Belfort and Porush were arrested, and pleaded guilty after a year of court proceedings and spent time in prison until later convictions. Their charges included artificially inflating penny stock before customers purchased it to later sell them back to the U.S. market place, as well as using offshore entities to transfer money to their firms. The defendant and the co-defendant used a Swiss bank account to keep eyes away. Belfort was sentenced to 42 years in prison, as well as ordered to pay over $100 million.
Having paid only over $10 million, Belfort claimed for an exemption but was denied by the court. During his 22 months in prison-a short term compared to many others who have spent a lifetime in prison due to their race or ethnicity- Belfort made sure to turn it into a “boy’s club,” and served his time playing tennis and writing about his great success in deceiving people. Now, he gives interviews to many renowned magazines and speeches to teach young minds how to be successful like him.