Background information

        His short ride in LF Rothchild got the wheels turning for him. He opened Stratton Oakmont, which he states, "started Stratton from out of the electrical closet of a used-car dealership” (Belfort 40). The image visualized of the old Stratton Oakmont office pales in contrast to the new photogenic office. In addition, his new office’s parking lot could be the fleet of a luxurious car dealership. Along with the cars, his greed permeated his personal space in any of his displacements.

        This greed and insanity catalyzed the start of his criminal career. His brokerage did not sell prosperous financial securities to its clients. Instead, he used a process he preferably calls (For many reasons) “Merchant Banking”. In his memoir, he describes it as the “[the] very process of buying stakes in private companies and then reselling a portion of my original investment (and recouping my money) that had turned Stratton into even more of a printing press than it already was. And, as I used the power of the boardroom to take my own companies public, my net worth soared and soared” (Belfort 46). To synthesize, he artificially inflated the price of the stock he held. To remove the sugar coat, it is a pump and dump scheme. 

        What is wrong with a pump-and-dump scheme? What is one to begin with? It is what Jordan Belfort smoothly described. However, I will lay it out in a way that will point out its ethical shortcomings without speaking Portuguese. He buys a part of a private company, usually a startup, then he would use his brokers to prescribe part of his stake over the counter(OTC) to his customers. Over-the-counter means privately traded, in an analogy: OTC: public stock as Adderall: ibuprofen. Then, he would make the private company public through an Initial Public Offering (IPO). Usually, these companies had no profitable track record or legitimate prospects. To cover its flaws, his spell of money-driven brokers avoided spelling out the risk associated with penny stock trades and pressuring customers to buy. For example, when Belfort was walking through his boardroom, he overheard one of his brokers named Bobby yell through the phone, “I need a decision—Bill! —I need a decision right now!...Steve Madden is the hottest new issue on Wall Street, and there’s nothing to think about! By this afternoon it’ll be a f*cking dinosaur!” (Belfort 44). As portrayed by my evidence, they used high-pressure sales tactics to get investors to buy the IPO. Once the investors bought through means of pressure, the stock price would skyrocket. Yay! His investors made all the capital gains they were promised. 

         So far it seems innocent but remember there is no such thing as an infinite money supply. Eventually, nobody is going to buy at a high market price, because of limited liquidity. Jordan Belfort knows it is abnormal for stock prices to be unexplainably high for long time periods, so he sells at the top when bids start to lower and spreads increase. He realizes his profits. In response to lower levels of liquidity (low hype), the price tanks in practically seconds. Now we label this a scam, as the customer loses through market manipulation, not through incompetency or self-merit.

          “Merchant banking” was not the only thing on his bucket list. He also committed money laundering, by allocating his illegal cash earnings to a Swiss bank account. The process he used for laundering money was multi-layered to reduce the risk of getting his assets seized. First, he used his ‘rathole’ named Elliot Lavigne. Jordan Belfort states, “He was stealing millions of dollars a year from Perry Ellis” (Belfort 109). In addition to Jordan Belfort’s statement, Lavigne was the president of clothing manufacturer Perry Ellis. He had secret connections with cheap overseas factories, allowing him to overcharge Perry Ellis a few dollars per garment. Then, he exchanged this ‘clean’ cash with Jordan Belfort's stock gains, similar to a swap contract. Aunt Patricia's Swiss bank account would contract the remnants of Belfort's greed-fueled insanity, in the process, it fooled the tailgating law enforcers who were ready to decorate the streets with flashing blue lights. In case they did suspect, any subpoena issued in his correspondence would yield no results in the Swiss banking system.

          His demise started with the press and ended with a cautionary warning. According to Bo Dietl, his demise started with stories about him, like "Steaks, Stocks -- What's The Difference", which is, “about the drugs and the hookers and the big spending” and “ It is intoxicating stuff for a young FBI agent making forty grand a year” (Belfort 389). Essentially, Bo is arguing Jordan Belfort is a captivating individual, so it makes him a target with a bull's eye the size of his Swiss bank account. Bo Dietl is a detective who has cracked down on big cases and works for Jordan Belfort. He shares his experience in an article titled "Inside the Wolf’s Den" where he states, “never realized that what he was doing was illegal” (Hyatt). This is contradicting Jordan Belfort’s claims of Bo helping him go under the radar. To synthesize their claims, there is probably some truth to both statements. Bo Dietl may have functioned as the gardener of Pablo Escobar. Meaning, he offered nothing to Jordan criminally.   Also, Jordan Belfort is not trying to hide anything in his memoir, he seems convincingly transparent. However, my peers might object, by claiming the drugs dazed his memory. In theory, I agree. However, Jordan Belfort uses a lot of imagery that seems abnormal for an intoxicated individual with a dazed memory.

         To add to my assumption of transparency, he admits, “For that matter, what would I be willing to pay Agent Coleman to lose my number forever? million? Certainly! Two million? Of course! Two million was chump change in the face of a federal indictment and the possibility of financial ruin” (Belfort 193). In other words, Belfort is thinking about bribing an FBI agent, because he discovers Agent Coleman Is breathing down his neck. Instead, he half-heartedly contemplated stepping down from Stratton Oakmont. With this decision, the wolf’s criminal career ends with no scratches and a few million in fines. However, he chooses to not settle with the Securities and Exchange Commission. In 1999 while Jordan was doing laundry, he was arrested at home in a dramatic manner by dozens of FBI agents. During the trial, his wife Nadine drops the “d-bomb” on him. He hesitated to cooperate, but he learns his peers also "snitched". Plus, he states, “If I didn’t cooperate, they would indict the Duchess and take her away in handcuffs” (Belfort 384). In addition, he would get 30 years in prison. Instead, he got a cost-of-living adjustment COLA, because he is a 110 million USD underwater. To compliment his monetary penalty, he also spent twenty-two months in a federal camp. During his time, he writes a memoir titled The Wolf of Wall Street