Belfort established Stratton Oakmont as a franchise of Stratton Securities, then later purchased the founder's shares. Stratton Oakmont functioned as a boiler room that sold penny stocks, and defrauded investors by offering "pump and dump" stock sales. During his years at Stratton, Belfort led a life of lavish parties and frequent use of recreational drugs particularly methaqualone, which he sold to him under the name "Quaalude"--that led to an addiction. Stratton Oakmont employed more than 1,000 stock brokers at any one time and was involved in securities transactions that reached over $1 billion. This included the first public offering of Steve Madden's footwear company. The company was subject to law enforcement authorities throughout its history, and its notoriety has inspired the movie Boiler Room (2000),[22and the biopic The Wolf of Wall Street (2013).Stratton Oakmont was under near-constant surveillance by the National Association of Securities Dealers (now the Financial Industry Regulatory Authority) from 1989 and onward. In December 1996, the NASD expelled Stratton Oakmont and put it out of the market. This was in exchange for a plea agreement with the Federal Bureau of Investigation. It was a deal involving pump-and-dump schemes that resulted in investor losses in the range of $200 million. Belfort was required to repay $110.4 million in losses he incurred by defrauding investors who bought shares. Belfort shared a cell with Tommy Chong while serving his sentence. Chong advised him to write about his experiences as an experienced stockbroker. [28] The pair were friends following their release from prison,[28] with Belfort praising Chong for his new career direction as an inspirational speaker and writer.At an inspirational talk Belfort gave in Dubai, United Arab Emirates, on May 19, 2014, Belfort stated:
No comments:
Post a Comment