Jordan Belfort

Jordan Belfort
Born:	July 9, 1962 The Bronx, New York
Charges:
Sentence:	4 years (served 22 months)
Facility:	FCI Otisville
Status:	Released

Jordan Ross Belfort (born July 9, 1962) is an American author, motivational speaker, and former stockbroker who served 22 months in federal prison after pleading guilty to securities fraud and money laundering in connection with a massive stock manipulation scheme that defrauded investors of approximately $200 million in the 1990s. Belfort operated Stratton Oakmont, a now-defunct brokerage firm that became notorious for its "pump and dump" schemes and high-pressure sales tactics. His memoir, "The Wolf of Wall Street," was adapted into a 2013 film directed by Martin Scorsese and starring Leonardo DiCaprio, bringing renewed attention to his crimes and subsequent career as a motivational speaker.

Summary

Jordan Belfort built Stratton Oakmont into one of the largest over-the-counter brokerage firms in the country during the late 1980s and 1990s, employing more than 1,000 stockbrokers at its peak. The firm became a symbol of Wall Street excess, with brokers using aggressive and fraudulent sales tactics to manipulate stock prices and defraud investors. Belfort personally lived an extravagant lifestyle funded by the fraud, including yachts, helicopters, mansions, and extensive drug use.

After cooperating with federal authorities and providing testimony against numerous associates, Belfort served less than two years in prison and was ordered to pay $110.4 million in restitution to his victims. His post-prison career as a motivational speaker and author has been controversial, with critics noting that victims have received only a fraction of the restitution owed while Belfort has continued to profit from his notoriety.

Background

Belfort was born on July 9, 1962, in The Bronx, New York, and raised in Bayside, Queens. His parents were both accountants. Belfort graduated from American University with a degree in biology, intending to attend dental school, but dropped out on the first day after a professor told students that dentistry was no longer a path to wealth.

Belfort worked briefly as a door-to-door meat and seafood salesman on Long Island before entering the securities industry. He passed his Series 7 exam and began working at L.F. Rothschild, but lost his job on his first day due to Black Monday in October 1987. He subsequently founded his own firm, which would become Stratton Oakmont, in a small office in Lake Success, New York.

Indictment, Prosecution, and Sentencing

The Stratton Oakmont Fraud

Stratton Oakmont specialized in "penny stocks"—shares of small companies that trade at low prices and are not listed on major exchanges. The firm used high-pressure sales tactics to convince investors to purchase these stocks at artificially inflated prices. Belfort and his associates would first acquire large positions in penny stocks, then direct their army of brokers to aggressively sell those stocks to unsuspecting investors, driving up the price. Once the price peaked, Belfort and insiders would sell their shares at a profit, causing the stock price to collapse and leaving retail investors with substantial losses.

The scheme defrauded more than 1,500 investors of approximately $200 million. Stratton Oakmont was also involved in money laundering, moving illegal profits through offshore accounts to evade detection. The firm cultivated a culture of excess, with Belfort rewarding top performers with cash bonuses, prostitutes, and drugs. Belfort himself became addicted to cocaine and Quaaludes during this period.

Investigation and Cooperation

The FBI and SEC began investigating Stratton Oakmont in the mid-1990s. The firm was expelled from the National Association of Securities Dealers in 1996 and forced to close. Belfort was indicted in 1999 on securities fraud and money laundering charges. Rather than go to trial, Belfort agreed to cooperate with authorities, providing testimony that led to the conviction of numerous former associates.

Guilty Plea and Sentencing

In 1999, Belfort pleaded guilty to securities fraud and money laundering. Under the terms of his cooperation agreement, he agreed to pay $110.4 million in restitution to the investors he had defrauded. In 2003, Belfort was sentenced to four years in federal prison. Judge John Gleeson noted that Belfort's cooperation had been substantial and resulted in numerous prosecutions.

Prison Experience

Belfort served his sentence at Federal Correctional Institution Otisville in Otisville, New York. During his incarceration, Belfort began writing his memoir after being encouraged by a fellow inmate—reportedly comedian Tommy Chong, who was serving time for drug paraphernalia charges. Belfort was released after serving approximately 22 months, receiving credit for good behavior.

Upon release, Belfort was placed on supervised release and required to devote 50% of his gross income to victim restitution payments until the $110.4 million obligation was satisfied. However, payments have been sporadic and substantially below this threshold.

Post-Release Career

After his release, Belfort launched a career as a motivational speaker and sales trainer, conducting seminars worldwide based on what he calls the "Straight Line Persuasion System." He published his memoir "The Wolf of Wall Street" in 2007, followed by a sequel "Catching the Wolf of Wall Street" in 2009.

The 2013 film adaptation directed by Martin Scorsese and starring Leonardo DiCaprio grossed over $400 million worldwide, significantly raising Belfort's profile and speaking fees. The film and Belfort's continued commercial success have been criticized by his victims, who argue that he has profited enormously from recounting his crimes while paying only a small fraction of the restitution owed. As of 2014, Belfort had reportedly paid only $11.6 million of the $110.4 million restitution judgment.

Public Statements and Positions

Belfort has expressed remorse for his crimes while also capitalizing on his notoriety. In interviews, he has stated: "I got greedy. I let money consume me, and it destroyed everything in my life." He has characterized his speaking career as a way to teach ethical sales techniques and help people avoid the mistakes he made.

Critics have questioned the sincerity of Belfort's remorse given his limited restitution payments and continued commercialization of his criminal past. Prosecutors have filed motions seeking to compel greater restitution payments, noting the disparity between Belfort's earnings and his payments to victims.

Terminology

• Pump and Dump: A securities fraud scheme in which promoters artificially inflate a stock's price through false or misleading statements, then sell their shares at the inflated price before the price collapses.

• Penny Stocks: Shares of small companies that trade at low prices, typically less than $5 per share, often traded outside of major market exchanges and subject to less regulatory oversight.

• Restitution: Court-ordered payment to compensate victims for financial losses resulting from the defendant's criminal conduct.

• Series 7 Exam: A securities industry licensing examination required to sell securities in the United States.

See also

• FCI Otisville
• Prison Consultants
• Federal Good Time Credit Policies
• Restitution, Fines, and Forfeiture