Who is Jordan Belfort?
By Louis Velazquez
Well some may call him a motivational speaker while others may call him a Wall Street criminal but anyway you slice it or dice it Jordan Belfort fell from grace and bounced back with fury.
Today, because of the fame of his book turned into a Martin Scorsese hit film “The Wolf of Wall Street,” people may look at him as an author of a popular book, which is not wrong because he is, however the story behind the story is what has many up in arms.
So lets back up a bit, did Jordan Belfort really do the things portrayed in the movie?
Chances are that he did that and much worse during that time, the movie doesn’t show the true boiler room atmosphere that you saw with the film appropriately entitled “Boiler Room.” I’m not going to dive into the movie “The Wolf of Wall Street” much but I will touch on it a little later on. I think that we need to get a better view of the atmosphere of Stratton and its impact on Wall Street that many people fail to understand.
They were trained to close and close at any cost, you don’t hang up the phone you let them hang up the phone on you, its taking someone to the mat. You have your cold callers and account openers, these are the people that were being trained to be the next big producers for the firm.
Stratton Oakmont perfected the art of selling a potential customer, making it so outrageous for them not to open an account that many of their clients would melt in their hands within a week of opening that account.
At the time there were many penny stock firms, well do we call them firms or should be call them “Schlock Houses” , either way there were many of them out there. This is where you had not so savvy people that happened to pass the series 7 test, that’s the test that allows someone to become a stockbroker and solicit clients to buy stocks, bonds or mutual funds.
These boiler room situations could be situated in a shopping mall or someone’s garage, it didn’t matter because the telephone gave them all the power in the world to be whatever they wanted to be. This was a time when the internet didn’t exist yet for the general public and you had plumbers, waiters and shoeshine workers portraying themselves as masters of the universe with decades of experience on Wall Street meanwhile they had no idea what the Dow was, never been to Wall Street itself and they were only 22 years old.
They would force feed and strong arm their clients into buying into illiquid public companies, you know the one that had the biggest rip in it for them, you would see them in a huddle of 3 or 4 people passing the phone around from one person to the other trying to beat the customer into a trade. These so-called stockbrokers were only trained to ram the stock of the day down their client’s throat at all costs.
Now I had to give a brief overview of the really seedy low end side of Wall Street at that time because it will give you a better idea of what Jordan Belfort created.
And I need to state this, this was NOT indicative of Wall Street as a whole during that time, these were a few firms that were created to take advantage of the fact that someone in Nebraska would be proud to say that they had a Stockbroker in New York City. Even though many of those firms were in the suburbs, far far away from Manhattan or even the five boroughs. While others that may have been on Wall Street were connected to an underworld that we will leave for another article as I want to focus on Belfort.
He changed the penny stock game and gave his stockbrokers the tools to break off and create their own firms to mimic what they learned at Stratton and worse. There was one firm that bilked investors out of much more than what Stratton did but you will never hear that story beyond a few random articles and those investors will never get restitution.
What Jordan Belfort did was beyond teaching people how to shove stocks down a clients throat, yes I have to be use that term because that is what was going on, but what he did was create a system.
A system called the “Straight Line” approach which gives a salesman, not just a stockbroker but any salesman a guide to keep the conversation going thus allowing the salesman to continue to close.
This was his greatest creation the perfection of a sales method that would allow a salesman to have a solid starting point with a hook factor as well as a number of follow through points. These follow through points are important as they allow for the true reason for not opening an account to come out. Its like the path of a psychologists, a series of guided questions coupled with information to get to the end reason why the person is reluctant to open an account.
With that information in hand the salesman can then connect with the client in a way that would make it more of a joint decision than a solo one, if you can envision that.
Even though Belfort is portrayed as a rogue stockbroker, doing some really crazy things and having all the homes, toys and money that he wanted, he is a very talented salesman, this is a fact not many can dispute.
“The Wolf of Wall Street” was outlandish, was insane, was too wild to be true but most of the movie, not all of course, but I’d say most of it depicts real events that transpired.
Through his efforts did he and his firm rip off many investors and cause them serious financial hardship? I would say they did rip off many investors and I would also say that some did face major financial hardship at their hands.
I would also say that he and his cohorts exploited the system, a system that allowed for Bernie Madoff and a bunch of mini Madoffs like Allen Stanford to bilk their clients out of billions and billions of dollars that will never be paid back. At least in the case of Belfort, he spent time in prison, his attempt to satisfy the outstanding debt owed to his defrauded customers by allowing the profits from the film and his books to be directed towards that debt is a good way to start.
What people wanted to see is Belfort being desolate with no way to rebound or make a living, they wanted him to suffer and not profit from his actions. I understand the anger but in the end when you pay your debt to society, no matter what cloud was over the path that led to paying that debt, a person has to be able to earn a living. At least now there is hope that investors will start getting financial redemption. That’s more than I can say for other victims of Madoff type of frauds.
Now to answer the question, who is Jordan Belfort?
Well at this time he is building up to be a very prominent international speaker, training others in his system of selling, a system that has allowed many people to earn an honest living from. So when I read articles attacking what he does for a living now it just makes me think of how many other motivational and training speakers out there aren’t exactly angels but they rose from the ashes and reinvented themselves, and get this they get paid to do so.
In the end if you look at films based on true stories like “Goodfellas” or real life characters like Jesse James, John Gotti or Lucky Luciano, these characters are embedded in American history. Some people idolize them but I think that they more idolize the lifestyle than the person, with the portrayal of Belfort in “The Wolf of Wall Street” I would say that this will also be embedded in American history and the lifestyle may also be idolized by some, hey its Hollywood at its best.
Just think about it how many people go to prison, write a book and then get Leonardo DiCaprio to play their character in a major motion film? Not many……