The True Story Behind Martin Scorsese's 'Wolf of Wall Street'

Martin Scorsese's 'The Wolf of Wall Street' is based on the rise and fall of Jordan Belfort, a young stockbroker-swindler in the 1990s who made millions all the while living in hedonism before being brought down by the FBI.

As portrayed by Leonardo DiCaprio. Belfort's unscrupulous business methods would ultimately implode, but not before committing money laundering and securities fraud, and ripping off clients. 

Belfort began his career as a wide-eyed and idealistic broker at L.F. Rothschild on Wall Street. 

When the stock market crashed on Black Monday, October 19, 1987,  Belfort found a new job as a penny stockbroker, and began a 'boiler room operation' located at a Long Island strip mall. There he would lead barely qualified salesmen [who would pressure] the naive into buying highly risky stocks of marginal companies," William Cohan wrote in The New York Times. The company was called Stratton Oakmont.

"'I don't know what was actually going on in the office besides the fact that they were selling crooked stocks, that they were earning mark ups of 100%, and you had people who came in off the street who'd been carpet layers who started earning $100,000 a month in gross commissions. So these were not Ivy League folks," commented Barron's editor Fleming Meeks said in a recent interview. Meeks covered Stratton Oakmont and Belfort for Forbes magazine in the 1990s.

"I think that if you walk out of the movie and thinking that Jordan Belfort is in any way an admirable person or somebody you want to emulate than you're really not paying attention," said Farran Smith Nehme, a film critic.

"However, there is a possibility - [like] when 'Wall Street' came out in the 1980s, Gordon Gekko was supposed to be a scathing portrait of American greed and Wall Street guys wound up embracing him as a kind of mascot," added Smith Nehme.

To help him make his millions, Belort employed the 'pump and dump' scheme, a form of micro-cap stock fraud, which involved artificially inflating value in order to sell cheaply purchased stock at a higher price. Penny stocks, also known as cent stocks, are commons shares of small public companies that trade at low prices per share.

Belfort made millions before the Feds caught up to his financial shenanigans, and was indicted in 1998 for securities fraud and money laundering. After cooperating with the FBI, he would serve 22 months in federal prison. 

Since then however, Belfort has failed to live up to the restitution requirement of his 2003 sentencing agreement, according to federal prosecutors. He ripped off investors to the tune of about $300 million. 

"They wanted a bigger piece," explained Nancy Porush in a recent New York Post article. Porush is the ex-wife of Belfort's protege Danny Porush, who is renamed Donnie Azoff in the film, and portrayed by Jonah Hill in an Oscar-nominated performance. (Danny Porush said he would sue Paramount Pictures if his name was used). He also served time in prison.

"Greed, power and control overtook everything. After a little while, Jordan and Danny started making serious money," Nancy Porush added.

"Unbeknownst to me, Danny and Jordan's firm was a classic 'pump and dump' operation - manipulation of the markets where prices are artificiality inflated and stock promptly sold off. Big time investors were being ripped off and the little people, too. But they always managed to keep one step ahead of the law, shutting down companies and opening up a new one under a different name," she added.

'The Wolf of Wall Street' remains a cautionary tale, which speaks to the dangers, sinfulness and immorality of greed, avarice and overindulgence.

Tags

'Wolf Of Wall Street', Jordan Belfort, Penny Stocks, Corporate Greed

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