How Jordan Belfort managed to build a shady business and get away with it
Martin Scorsese’s famous film The Wolf of Wall Street has been widely acclaimed by audiences and critics alike. However, not everyone knows that the prototype of the main character played by Leonardo DiCaprio was a real-life Jordan Belfort.
The trader was born in New York in 1962. His parents taught him from an early age that work was the most important way to achieve wealth. So Jordan started working as a schoolboy. He shovelled snow off sidewalks and sold ice cream on beaches. At the age of 18, Belfort met three sole proprietors who, like him, aspired to great wealth. They started making seashell jewellery and selling it to tourists, earning about US$200 a day. It was not a bad income, especially for young people. The young men also ran a sweet shop.
When it came to choosing a career, Jordan was not guided by skills or dreams but only by which professions earned more. So he decided to become a doctor and enrolled at the University of Washington. After graduating with a degree in biology, Belfort went on to study dentistry. But when he heard that doctors’ salaries were falling, he dropped out without regret.
Belfort’s career path
At the age of 23, Jordan got a job as a caterer, but the job did not provide the income he was looking for. So the entrepreneur took the initiative. He negotiated with suppliers for a large shipment of fish, but only on credit. At the same time, Belfort used the money to buy a truck, which enabled him to deliver products to other states. Customers from different regions started to arrive, and Jordan began to increase his purchases. Eventually, however, he wasn’t making enough money to cover drivers’ salaries and suppliers’ debts. As a result, the small business had to close down.
Belford decided to take a different approach to acquiring the wealth he desired. He successfully used his parents’ and personal contacts to get into L.F. Rothschild. However, he only worked there for a few months to obtain his broker’s licence. Jordan set up his own firm, whose main aim was not to build a reputation but to earn high transaction commissions. This meant that nobody at Stratton Oakmont really cared about trying to retain or benefit a customer. Fraudulent trades and manipulation were used, targeting investors and employees alike. The shady profits from the transactions were laundered through another Belfort company, Steve Madden Shoes.
The activities of the broker and his business did not go unnoticed by the security services. In 1998, Jordan was arrested. But Belfort got away with it. He brought in some lawyers he knew. They reduced his sentence from 30 years to 22 months. Moreover, Jordan didn’t waste any time in prison: he published his memoirs, which were used as the basis for the film.