Dear
Friends:
Just
wanted to share some personal thoughts with you and an article detailing the
life of Jordan Belfort, whose story will be featured in Scorcese's film,
"The Wolf on Wall Street," starring Leonardo Dicaprio that will begin
playing tomorrow in theaters.
In
the first year of fighting my white collar case, I found myself locked in a
cell 23 hours a day. During that period,
I spent most of my time reading. Of the
hundreds of books I read, numerous works had a profound impact on me. The autobiographies of Clinton, Gandhi,
Mandela, and Sidney Poitier were particularly moving. Jim Bakker's memoir, "I Was Wrong,"
affected me deeply. Terry Anderson's
"Den of Lions" and Terry Waite's "Taken On Trust,"
detailing both men's years of captivity in Lebanon, most in solitary, were
heartbreaking, yet inspirational in equal measure. Solzhenitsyn's volumes, "The Gulag
Archipelago," depicting the Nobel Laureate's life in the Soviet prison
camps, and his subsequent conversion to Christianity, still resonate with me to
this day. And then there were Jordan
Belfort's memoirs, "The Wolf on Wall Street," and, "Catching The
Wolf on Wall Street."
Belfort's
books hit home, connecting with me. I
could relate to most of what was written.
Like Belfort, I was facing serious white collar charges, I had managed
an Investment Fund, I had failed and come up short. Though my story is not as raucous as
Belfort's, nor is the dollar amount as high, it does share many similarities: a
dysfunctional and turbulent marriage, young children bearing the fallout of a
father's failure, and the pitfalls of addiction, succumbing to dreadful
vices. Though at times I was appalled by
what I read, seeing reflections of my own life in Belfort's experience, I also
found encouragement in his story. Oddly,
God used Belfort's tale to peel back layers of darkness in my own life,
allowing me to see light, to feel hope.
His saga, similar to my own, offered empowerment in my time of
trouble. By seeing what Belfort did with
his personal collapse, what he accomplished during his prison years, and what
he's doing now to right his wrongs, reaffirmed God's plan of redemption for my
own life.
Years
back, when I read Belfort's story, it inspired something greater, pushing me to
reject the life and world in which I was tossed, to find that inner strength to
will me through heartache and setback, to listen with determined focus to a
still small voice echoing in my conscience, "This will be you. Trust me, do your part."
Years
later, those words still ring true in my heart.
I've never let go of God's promise.
It remains a fire that burns in my spirit, pushing me through every
difficult day, connecting me with my rediscovered life, reinvented self,
causing my mind's eye to see a future that some can't.
This
week, I was whisked back to the early days of this harrowing ordeal, to a time
when my promise was spoken, upon reading the Bloomberg BusinessWeek article
below on the life of Jordan Belfort.
Though not written from a spiritual perspective, it's a story of
redemption nonetheless. Next week,
Belfort's tale will be depicted on the big screen in the movie, "The Wolf
on Wall Street," starring Leonardo Dicaprio. I'm not sure if the film will convey the
redemption aspect of Belfort's life, but the following article certainly does.
Steve
Jordan Belfort, aka the Wolf of Wall Street, hates it when people describe him as a criminal. “‘Convicted stock swindler’—it’s like it hurts my heart,” he says, practically shuddering. “I know it was true, but it’s not who I am. I say to my son, I say it to everybody who I try to mentor: We are not the mistakes of our past. We’re the resources and capabilities that we glean from our past. And it’s so true.”
It’s a delicate argument for Belfort to make. He
will forever be associated with Stratton Oakmont, the Long Island penny-stock
boiler room he ran in the 1990s. Stratton employed more than 1,000 brokers at
its peak, before the Securities and Exchange Commission shut down the company
and the FBI arrested Belfort, in 1998. Convicted of money laundering and
securities fraud in 2003, he received a four-year prison sentence—he served
only 22 months—and was ordered to repay $110.4 million to a victim compensation
fund. Other terms for the kind of outfit he built and ran are “pump and dump”
and “chop-shop.” The words “fraud” and “crook” come up frequently as well. “It
chokes me up a little when I think about it. … I was a bad guy. And it wasn’t
like I started that way,” he says, his voice becoming tight. “You can get
desensitized to your own actions—it’s easy on Wall Street. Before you know it,
it’s like everyone’s just a number.” He goes on: “I shouldn’t really care what
people think of me. … I know I’m good. But of course I do care.”
Belfort, 51, is in Fort Worth for two days in October
speaking to the Young Presidents’ Organization, a secretive networking group
for CEOs and other senior executives under the age of 45. His theme, as usual,
is what he’s learned from his experiences about how others can avoid the pain
he caused and suffered. Belfort delivers a slick, self-deprecating performance
describing how he drove his life into the gutter with greed and drugs and
excess, how he stole millions from people and went to jail for it, and how he
reinvented himself as a legitimate businessman. He’s a natural performer, and
in spite of his tarnished background—or more likely because of it—audiences
appear genuinely moved by what he says. It doesn’t hurt to open appearances
with a trailer for The Wolf of Wall Street, the movie based on his story, which
is due to open, after some editing hiccups, on Christmas Day.
“To my shock it got picked up, with this bidding
war between Leonardo DiCaprio and Brad Pitt,” Belfort says, “and I chose Leo
and Martin Scorsese.” In addition to several million dollars that have flowed
from book and movie deals, Belfort gets paid in the neighborhood of $30,000 for
a speech—not bad for an hour’s work, although it requires him to spend the
night in Fort Worth. A portion of his income will go to repay the investors whose
money he lost.
Belfort makes a very good living, but it’s
crumbs compared with the millions he says he once generated every day, pushing
crappy $4 stocks on retirees in Orlando. In addition to traveling the world
speaking, he works as a consultant to individual companies, talking about
business ethics or teaching his sales techniques—the same ones that fueled his
brokerage firm—which he argues can also be put to good use. Belfort says he’s
been hired to do work for Delta Air Lines, Symantec, Virgin Airlines, Wyndham ,
Telstra, Deutsche Bank , Fairfax Media , Southern Cross Austereo, and Absa
Bank, among others. So far, almost all of his corporate clients have been
abroad; in the U.S., the baggage of his criminal case may have created too much
of a minefield for him to navigate, although he hopes this will change.
“From the letters and things we get, I think a
lot of people in the U.S. think Jordan is thrilled about what he did, and that
he partied hard and all that,” says Belfort’s fiancée, Anne Koppe, who runs his
business with him out of Hermosa Beach, Calif. “He’d love [the U.S.] to be his
main market, but he wanted to make sure that his message was pure and that
people responded properly to it.”
Belfort says he doesn’t want to profit from his
crimes, but of course without them there would be no Wolf of Wall Street, no
notoriety, no redemption story, no one paying him to talk about his life, and
no fraternizing with Leo, about whom Belfort sounds a little star-struck. “You
can’t change what you’ve done, you can only learn from it and try to be a
better person for it and embrace it and grow. I’m not saying I’m Gandhi or I’ve
discovered the cure for everything that ailed me emotionally or my
insecurities. But, you know, I try really hard to be the best person I can be
every single day.”
Belfort’s $30,000 atonement speech is very
earnest. His books, The Wolf of Wall
Street and its sequel, Catching the
Wolf of Wall Street, revel in crime and the high life. They recount in
loving detail every pill he popped, every Concorde flight he took, and every
prostitute he hired as he built his empire of sleaze, Stratton Oakmont, into
“one of the largest and by far the wildest brokerage firms in Wall Street
history.” The over-the-top antics depicted in the books read like submissions
to Penthouse Forum: A young female sales assistant takes turns servicing the
men at the office, like a shoe shiner; there are drugged-out helicopter rides
and blitzed trips on private jets; Belfort goes hooker shopping with
buttoned-up Swiss bankers. All of it happens against a backdrop of Belfort’s
specially trained brokers making millions selling worthless stocks to gullible
investors.
The scheme Belfort's firm employed to make money
will be familiar to even the most junior enforcement attorney at the SEC:
Stratton Oakmont would accumulate shares of so-called penny stocks, which tend
to be thinly traded, stashing them in secret accounts Belfort refers to as
"ratholes." The army of sales guys would feverishly work the phones,
making cold calls like characters in a David Mamet play. As the price of a
stock gradually rose, Belfort and his partners would dump their own shares at a
profit and then step out of the way as the thing crashed. The government
alleged that he defrauded investors of more than $200 million.
Belfort says he can't believe he was ever there.
"I've had so many people tell me they've become successful from reading
this book, in the sense that it motivated them to overcome obstacles in their
life – and I love those emails," he says. "And then I get the
occasional a-hole who will write me, 'Oh, I want to go f-ing do what you did, I
want to go do Quaaludes.' And obviously that I'm not very fond of, okay?"
In 1994, Stratton Oakmont settled a civil
securities fraud lawsuit with the SEC. The firm agreed to pay a $2.5 million
fine, and Belfort and his partners, Daniel Porush and Kenneth Greene, agreed to
$100,000 fines apiece. None of the three admitted or denied the SEC's
allegations in the settlement, although Porush later went to prison over
Stratton Oakmont. Greene pleaded guilty in 2003 to criminal charges related to
another boiler room operation. Belfort was barred for life from the securities
industry, and he was indicted in 1998. He cooperated with the FBI, finking on
his former employees.
He reported to a federal prison camp in Taft,
California in 2004. It was during his 22 months there that he decided to write
his memoirs. Incredibly, his cellmate was Tommy Chong, of Cheech and Chong, who
was serving a nine-month sentence for selling drug paraphernalia – bongs in
particular. As Chong describes it, the Taft Federal Correctional Institution
would beat many Manhattan hotels for comfort. He says Belfort's arrival
"was like Elvis coming to jail" and that his roommate spent his days
playing tennis and backgammon, cleverly hiring other inmates to do his chores
for him.
"We were part of the elite gang,"
Chong says, adding that for a stretch they ate meals "Goodfellas-style" with another famous inmate, the PGA Tour
caddie Eric Larson, who was serving time related to drug charges. Larson
"Worked in the garden, and he grew these fresh, delicious vegetables, and
he used to cook them," Chong says. "We had these beautiful
vegetarian, healthy meals every night, and Jordan was part of the gang. We had
a nice little hierarchy there, intelligent famous guys hanging out
together."
Chong was working on a book, and after listening
to Belfort regale him with tales of his own wild life, he urged him to put it
down on paper. "All the stories were really about how he coped with his
inadequacies, you know?" Chong says. "Like, he is a genius … but he
is short, shorter than most, and Jewish, and so he compensated with money, you
know, being able to make a lot of money. But the way he made it was part of his
genius, because he would inspire salespeople to basically go rob people."
Belfort says he modeled his writing after Tom
Wolfe, the author of The Bonfire of the
Vanities. Hunter S. Thompson inspired him, too. Once he finished his
manuscript, he quickly found that infamy could be lucrative. Multiple
publishers were interested in his book, which ended up being sold to Random
House for an advance of more than $1 million. An option on the film rights
brought in another $1 million or so. At the time, Belfort was freshly out of
Taft and on probation, and 50 percent of all of his income was going to repay
his investors. He decided to try the speaking circuit and started giving talks
based on his life story for free at colleges. The financial crisis was raging,
and "there was no money coming in," Belfort says. "We were
behind on all the credit cards. It was terrible."
After setting up his author page on Facebook, he
learned that, rather surprisingly, he had a huge following in Australia. He
found an agent there and went on a speaking tour. That led to engagements at
companies – Belfort lists Virgin, Symantec, and Deutsche Bank as some of the
first ones, noting that Virgin founder Richard Branson took a particular
interest in him. Even as his career as a motivational speaker gained momentum,
he was hesitant to try to monetize the one truly valuable skill he felt he
possessed, the ability to teach others how to sell. This is how he'd driven
dozens of kids from Long Island to get investors to buy his worthless stocks.
"Imagine if Apple had enough parts to make a million iPhones, but they
said, 'Well, let's make 5 million – we'll just put the s--- parts in after we
run out of the good parts,'"Belfort says. "That was really the
mistake that I made. My ability to sell outstripped my ability to manufacture
good deals." He was reluctant to share his technique at first, having
learned the hard way how aggressive sales tactics can be misused. But
eventually Koppe and others persuaded him to try teaching it to companies. Even
DiCaprio weighed in. "Dude, what's f—ing wrong with you?" Belfort
recalls DiCaprio saying. "There's nothing wrong with selling. It wasn't
the selling that was evil. It's what you did with it."
Belfort calls his method the Straight Line
Persuasion System. "There are certain elements of influence that you have
to line up before someone says yes," he says, pulling out a pen and
starting to scribble on a flyer lying on the table in front of him.
How much does he get paid to do all this?
"Let's just say, you know, my time is worth more than $5,000 a day. Well,
$10,000 a day," he says. "Say more than five or ten." Then:
"As much as fifty grand a day." But, he adds, "The biggest money
I'll make by far in the next five years will be the books and the movie, which
will probably be twenty, thirty million dollars, and I'm not even getting a
dime of that. I gave 100 percent of that back to the investors."
In the meantime, Belfort is working on his next
book while spending time with his kids, who are 20, 18, and 16, and preparing
for the onslaught of publicity that will accompany the movie. He can give only
so many speeches a year – he finds the constant travel to be something of a
grind. He says he's thought about trying to expand his sales-training business
online or even franchising it out by training other people to teach his
methods, but so far no one's been able to do it as well as he has.
On October 6, the rather large ballroom at the
JW Marriott Hotel in Grand Rapids, Michigan fills almost to capacity with local
business folk who've come for a luncheon hosted by the city's Economic Club.
Belfort hops onstage with his hands in perpetual motion, a spark plug in a
light blue dress shirt. He carries the onlookers through his story: He came
from a good, middle-class family on Long Island; he spent one day in dental
college to please his parents but then dropped out; he tried to make money as a
door-to-door seafood salesman, which he was pretty good at; then he heard about
a kid from his neighborhood who'd gone to Wall Street and made a fortune.
Belfort became infatuated with the idea, and it wasn't long before he was
crashing helicopters onto his lawn and snorting drugs with high-priced call
girls.
"You can't be half-pregnant when it comes
to ethics. Every time you step over the line and back again, the line moves a
little bit," he assures the crowd. "There's no way to succeed in
business without the highest ethical standards."
