Jordan Belfort is a former American stockbroker, entrepreneur, author, and speaker who was arrested and found guilty of stock-market manipulation through his broker company.
Belfort became a millionaire by selling shares at low prices over the phone. However, he was later accused of fraud and violation of stock exchange laws, which led him to spend 22 months in prison.
After being caught and going to jail, he wrote the famous autobiographical book The Wolf of Wall Street, which was adapted to the cinema in 2013 by Martin Scorsese and became a great success at the box office.
- Name: Jordan Ross Belfort.
- Birth: July 9, 1962.
- Place: New York, USA.
- Known for: being The Wolf of Wall Street.
- Notable works: The Wolf of Wall Street, Catching the Wolf of Wall Street.
- Wives: Denise Lombardo (1985-1991), Nadine Caridi (1991-2005), Anne Koppe (2008-2020), Cristina Invernizzi (2021-present).
Biography of Jordan R. Belfort
Born of a Jewish family, Jordan Ross Belfort is the son of Leah and Max Belfort, who were accountants, although later his mother became a lawyer. He was raised in the Queens neighbourhood of New York City and from his teen age he has showed an understanding of business.
Jordan and his childhood best friend, Elliot Loewenstern, dedicated themselves to selling Italian ice cream on the beach, and they transported it in portable refrigerators. The venture allowed them to earn 20,000 dollars between completing high school and starting college.
Belfort studied Biology at American University with plans to enrol in dental school. He planned to study dentistry, so he enrolled in the University of Maryland School of Dentistry.
However, his stay at that institution did not last long. The dean on his welcoming speech on the first day said ‘The golden age of dentistry has ended. If you are here just to try to get rich, you are in the wrong place.' And well, we can guess why Belfort left that career.
After his short stay in dental school, Belfort had a home delivery business of meat and seafood in Long Island, New York. At first, he was successful, according to Belfort himself, selling 2,250 kilograms of meat and fish a week.
But then the business went into decline and the young entrepreneur, only 25 years old, declared himself bankrupt.
And here is where his career as a stockbroker at LF Rothschild began. A family friend helped him with a job as a trainee stockbroker and was later fired when the company faced financial difficulties caused by Black Monday in 1987.
In 1990, at the age of twenty-two, he founded his own brokerage company, Stratton Oakmont.
Stratton Oakmont and Belfort's Frauds
During the 1990s, he founded, along with Danny Porush, the brokerage firm Stratton Oakmont. This company worked very well and was dedicated to selling penny stocks, that is, stocks of low value, usually less than 5 dollars.
Belfort resorted to pump and dump, that is, he inflated the price of the stocks he sold by spreading news and rumours that were false. The goal was to push the quotation up so that the owners of the company could sell and benefit. However, after these sales, the price plummeted, and those who held these assets lost money.
The stocks sold with this fraudulent method did not even have an expectation of recovery, since the increase in their value was only sustained by false information.
During the years he was president of the company, Jordan Belfort led a very tumultuous lifestyle, with continuous parties and a strong addiction to drugs, as can be seen in the movie The Wolf of Wall Street, starring Leonardo DiCaprio.
This company had more than 1,000 stockbrokers on its staff and participated in the issuance of new shares worth more than 1 billion dollars of some 35 companies, including a public offering of sale (OPV) of the shoe company Steve Madden Ltd. which turned out to be fraudulent.
To end the continuous scams, the financial regulator, Joseph Borg, formed a multi-state working group that led to the processing of the Stratton company.
Jordan Belfort was accused in 1998 of securities fraud, money laundering and manipulation of the securities market. After reinstituting with the FBI, he was imprisoned in a federal prison for 22 months instead of four years, convicted for pump and dump.
This translated into a loss of 200 million dollars for investors. Belfort must indemnify, according to justice, with more than 100 million to his former clients.
It was in prison where Jordan Belfort met Tommy Chong, who encouraged him to write his stories and publish them.
👉 Find out the most notorious investment scams.
Did Jordan Belfort indemnify his victims?
Belfort has been paying indemnities, but his obligations in this matter are not settled.
After his release from prison, the agreement was to pay 50% of his income to his defrauded clients. However, in 2013 the US Department of Justice filed a complaint alleging that this had not been fulfilled during the previous four years (since 2009).
BusinessWeek reported that Belfort had reported income of 1.2 million dollars for the sale of the rights to the movie ‘The Wolf of Wall Street'. However, he would have only paid 21,000 dollars for the restitution of his victims.
Belfort assured that it was the Government that would have denied the use of 100% of the revenues from his books for the compensation of his victims.
Training Program “The Straight Line System”
At the end of the film ‘The Wolf of Wall Street‘, Jordan Belfort appears giving a sales training in which he asks his students to sell him a pen.
This scene shows the sales training program developed by Jordan Belfort, “The Straight Line System“. This system is based on the persuasion techniques that Belfort used during his career in the financial industry and that allowed him to achieve great success in the sale of securities.
The central concept of “The Straight Line System” is to establish an emotional connection with the customer and guide him through a linear sales process. Belfort emphasizes the importance of establishing a relationship of trust with the customer, understanding their needs and objectives, and presenting a convincing value proposition.
The system is based on a series of key steps that the salesperson must follow to close the sale effectively. These steps include:
- Open: Capture the customer's attention and establish an emotional connection from the beginning.
- Present: Communicate the benefits and features of the product or service offered clearly and persuasively.
- Reveal: Identify and address the customer's objections or concerns honestly and convincingly.
- Resolve: Provide solutions to the problems posed by the customer and overcome the barriers that prevent the sale from closing.
- Close: Ask for the sale directly and guide the customer to make an affirmative decision.
The system also emphasizes the importance of tone of voice, body language and effective communication to generate trust and persuade the customer. Belfort has taught this system through seminars and training courses, where he shares his strategies and techniques with sales professionals in various industries.
Curiosities of Jordan Belfort's life
A curious fact of Belfort's life is that he acquired a luxurious yacht called Nadinne, which was originally built for the famous Coco Chanel. This suffered a shipwreck off Sardinia in June 1996. All the crew survived, but the boat sank.
Nadinne's shipwreck happened due to the insistence on going out to sea, when the captain advised against it due to the weather conditions. And the warnings were true, since a wave broke the yacht's hatch and the accident occurred.
Another interesting fact is that Belfort invests in cryptocurrencies, despite being sceptical about them at first.
Currently, Belfort is dedicated to giving lectures and seminars. His speech is about the importance of ethics in business and learning from mistakes. Although, it sounds paradoxical that, according to various sources, he has stated during his presentations that 95% of his business was legitimate.
We don't know if Belfort is or is not sorry for his actions. Only time will tell, but the truth is that the story of this striking and peculiar character can make us reflect on how the financial market not only allows us to generate wealth, but also to scam and on a large scale.
You might also be interested in:
- Nick Leeson's bankrupcy of the Barring Bank
- The secrets of the best traders
- How much money do traders earn?
FAQs about Jordan Belfort
What happened to Jordan Belfort?
Jordan Belfort was convicted of fraud with sentences of four years in prison, though he ultimately served only 22 months. During his prison time, he wrote a book titled ‘The Wolf of Wall Street' which became the best-selling at that time. He also run workshops and trainings on investment and corporate sales.
Is Stratton Oakmont still open?
No, it was founded in 1989 and it defrauded many shareholders leading to the arrest and incarceration of several executives and closing of the company.