As Martin Scorsese’s new film, The Wolf Of Wall Street, hits cinemas in the UAE. We explore the dizzying rise and devastating collapse of its inspiration – stockbroker Jordan Belfort.
If capitalism were something you could wring out of the sky and mould into the shape of a person, the result would be Jordan Belfort – better known as the Wolf Of Wall Street. Belfort (51) was a stockbroker who made US$250 million by the time he was 25, happily indulging every vice he could think of along the way, before watching his empire collapse when the FBI came knocking.
His life is the subject of a new film by Martin Scorsese (based on Belfort’s memoirs), with Leonardo DiCaprio playing the wolf himself – not bad for a guy who started out scoring dollars on the beach.
“I hit it big when I was 16, selling ices from blanket to blanket on the beach,” says Belfort. “After a while, I had 12-year-olds selling pukka shell necklaces for me. It was always like that, I’d always wanted to make money, but I didn’t come from a wealthy family. I came from a good family, was taught right from wrong, which is an interesting part of the story because of the way I spiralled out of control later.”
Belfort speaks with his hands, advancing and retreating on his chair like an army fighting the world’s most intimate war. When he gets excited, his voice raises, his fists clench, utter conviction flooding off him in waves. If he hadn’t become a stockbroker he would have made an excellent cult leader.
Belfort used the money he made on the beach to get into dental school, which he stuck out for one day. “I always remember, the day I walked in there – the professor said: ‘I gotta say, the golden age of dentistry is over. If you’re here to make money, you’re probably in the wrong place.’ I thought, ‘I’m in the wrong place and I got up and left.’”
What followed was a rags-to-riches tale so perfect, it’s difficult not to search for holes in it. Belfort claims he answered a blind ad for a job selling meat door-to-door. After smashing all their sales records, he went private, buying his own trucks and employing his own staff, until he had 24 trucks on the road, driven by junkies and dropouts. The money rolled in. Until it didn’t anymore and he went bust.
Struggling to pay the rent, but with a gift for sales, he made his way to Wall Street in 1987, spending six months connecting calls until he got his stockbroker licence. On the day it came through, the market dropped out, his firm went bankrupt and he found himself jobless again. Undeterred, he went to work selling penny stocks at Investors Center, earning enough money to buy a company called Stratton Securities. Which is when things went brilliantly wrong.
Belfort was hiring hungry kids willing to cold call investors and read them a script of his own devising. And we do mean kids. He wasn’t interested in stockbrokers or people with college degrees. In fact, any sort of education was anathema to him – even a high school diploma was a reach. He wanted zealots, and he promised to make them rich so long as “no one hangs up the phone until the customer buys or dies”.
“At the moment, with the economy the way it is, everybody’s interested in making money, not just for themselves, but for their families, for their children,” says Belfort. “People say money doesn’t matter, so I look at them and say: ‘So, you’re broke.’ Money is important. It won’t make you happy, but an absence of money can buy you an awful lot of misery. I look at money like this: it’s a problem that needs to be solved.”
Unfortunately, Belfort solved the problem by cheating. The kids he was hiring for Statton Oakmont Securities were running a classic “pump and dump scheme” where brokers artificially drive up the price of stocks by egging on investors, allowing Belfort and his cronies to cash out at the top of the market, before sitting back with a bucket of champagne to watch the stock price collapse.
As everybody got rich, his offices became home to every hedonistic delight he could think of, from midget-tossing competitions to parties riddled with illicit substances and even more illicit ladies. He took his entire staff out to New York’s most expensive restaurants, footing a bill that routinely included food, drink and damages.
And his personal life was just as obscene. Hooked on just about everything a human body can be hooked on, Belfort managed to land a helicopter in his back garden, sink his private yacht in a storm off the Italian coast, drive his car through the garage door with his child unbuckled in the passenger seat, and kick his model wife, Nadine Belfort, down the stairs after a particularly heinous binge.
But as any tightrope walker will tell you, teeter for long enough and eventually you’ll fall. “I actually got caught for something that really wasn’t related to what I was doing,” says Belfort. “I smuggled some money to Switzerland at the height of my insanity and then the banker who I was doing business with got indicted for doing it with someone else. So he was in the United States and he started co-operating, and he gave a list of everybody that he had done business with. I was on that list.”
Soon the FBI was at his door, throwing him in jail to await trial and sentencing. Knowing that a big number was coming, Belfort cut a deal – selling out friends and co-workers, including his accountant “Chef”, who cooked the books and laundered money – to reduce his sentence. He served 22 months in 2004, losing his family and fortune, and being ordered to pay back US$110 million, with 50 per cent of his gross income automatically deducted until he’s clear of the debt.
“People say money doesn’t matter, so I look at them and say: ‘So, you’re broke.’ Money is important. It won’t make you happy, but an absence of money can buy you an awful lot of misery”
As punishments go, it was certainly poetic. It may also have saved Belfort’s life, forcing him to clean up and go legit. These days, he’s a changed man, owning a modest three-bedroom house near his ex-wife and kids, stripped of bling and 10-years sober, despite earning enough through his books and motivational speaking tours to have paid over US$20 million off his debt. Belfort says he “despises” the man he was in The Wolf Of Wall Street – written on the advice of his cellmate Tommy Chong, of Cheech and Chong fame.
But while Belfort may have gone straight, Wall Street hasn’t, as evidenced by the recent sub-prime mortgage crisis. It’s a situation Belfort believes will keep repeating until tougher laws are enacted.
“I think the SEC should be rolled into the justice department,” he told the ABC. “Right now it’s a separate agency that does not have criminal powers. I believe that if the FBI was sending out these subpoenas, you would find a whole different perception going on in Wall Street. Ultimately though, it has to come from the top down. If the culture of the company is one of greed then everybody ends up becoming greedy. If the culture is one of ambition and balancing out capitalism with an appropriate amount of social conscience, then the firm takes on an entirely different personality.”
Belfort should know. He built an empire of wolves, and still got eaten by Wall Street.
Words: Stuart Turton