WEBVTT 00:00:00.000 --> 00:00:02.879 Welcome back to the Deep Dive. Today we are tackling 00:00:02.879 --> 00:00:05.040 a subject that, I mean, it feels almost synonymous 00:00:05.040 --> 00:00:07.940 with a certain era of American excess. Oh, absolutely. 00:00:08.179 --> 00:00:10.759 If I say the wolf, you immediately have an image 00:00:10.759 --> 00:00:13.509 in your head. Yeah. Leonardo DiCaprio. You're 00:00:13.509 --> 00:00:15.109 picturing Leonardo DiCaprio. You're picturing 00:00:15.109 --> 00:00:16.910 a white Lamborghini Countach. You're picturing, 00:00:16.910 --> 00:00:19.429 I don't know, lobsters being thrown at FBI agents 00:00:19.429 --> 00:00:22.010 on a yacht. You are thinking of the movie. Which 00:00:22.010 --> 00:00:24.329 is completely understandable. I mean, that Scorsese 00:00:24.329 --> 00:00:27.109 film was a massive cultural phenomenon. It really 00:00:27.109 --> 00:00:29.809 did. It turned a financial criminal into a kind 00:00:29.809 --> 00:00:33.189 of rock star. Exactly. And that is precisely 00:00:33.189 --> 00:00:36.229 why we're here today. We are going to push that 00:00:36.229 --> 00:00:38.950 Hollywood glamour aside. We have to. We are stripping 00:00:38.950 --> 00:00:41.229 away the cinematic lens to look at the actual 00:00:41.229 --> 00:00:43.950 source material regarding Jordan Belfort. And 00:00:43.950 --> 00:00:46.469 we have a massive stack of notes here, comprehensive 00:00:46.469 --> 00:00:49.329 biographical accounts, actual court documents 00:00:49.329 --> 00:00:52.210 regarding restitution, reports on his post -prison 00:00:52.210 --> 00:00:54.390 ventures and, you know, the nitty gritty mechanics 00:00:54.390 --> 00:00:57.409 of how his schemes actually work. The mission 00:00:57.409 --> 00:00:59.929 here is really specific, I think. We aren't here 00:00:59.929 --> 00:01:02.469 to retell the party stories. We want to understand 00:01:02.469 --> 00:01:05.370 the mechanics. Right. How does a dental school 00:01:05.370 --> 00:01:07.969 dropout become one of Wall Street's most notorious 00:01:07.969 --> 00:01:10.930 figures? And maybe more importantly, after losing 00:01:10.930 --> 00:01:13.310 absolutely everything, his freedom, his money, 00:01:13.409 --> 00:01:15.969 his family, how does he manage to sell himself 00:01:15.969 --> 00:01:18.430 back to the public? That is the big question. 00:01:18.590 --> 00:01:21.969 Yeah. Really is. Is this a genuine redemption 00:01:21.969 --> 00:01:25.950 arc or is it just the ultimate sales pitch? We're 00:01:25.950 --> 00:01:28.709 going to trace the rise, the reality of the fall, 00:01:28.849 --> 00:01:31.769 and the specific details of the restitution and 00:01:31.769 --> 00:01:34.629 reinvention that often get overlooked. Because 00:01:34.629 --> 00:01:37.049 when you actually look at the documents, the 00:01:37.049 --> 00:01:39.510 story is much more complex and frankly a lot 00:01:39.510 --> 00:01:41.930 more cynical than the movie suggests. And we 00:01:41.930 --> 00:01:43.670 have to start by just acknowledging the source 00:01:43.670 --> 00:01:45.489 of our perception, right? Most of what people 00:01:45.489 --> 00:01:47.170 know comes from his memoirs, The Wolf of Wall 00:01:47.170 --> 00:01:48.950 Street and Catching the Wolf of Wall Street. 00:01:48.969 --> 00:01:51.450 So his version. His version, exactly. But as 00:01:51.450 --> 00:01:53.629 we go through this, we have to weigh his narrative 00:01:53.629 --> 00:01:56.829 against the legal reality. The source material 00:01:56.829 --> 00:02:00.250 paints a picture of a man who is, above all else, 00:02:00.349 --> 00:02:03.530 a cyclical creature. He builds, he scales, he 00:02:03.530 --> 00:02:06.750 crashes, and then he pivots. So let's unpack 00:02:06.750 --> 00:02:08.729 this. Let's go right back to the beginning. Before 00:02:08.729 --> 00:02:11.349 the Ferraris, before the Quaaludes, we're talking 00:02:11.349 --> 00:02:14.969 about Jordan Ross Belfort, born 1962. Raised 00:02:14.969 --> 00:02:17.710 in Bayside, Queens. Right. And here is the first 00:02:17.710 --> 00:02:19.969 nugget from the file that I think just sets the 00:02:19.969 --> 00:02:23.909 stage perfectly. His parents, Max and Leah, were 00:02:23.909 --> 00:02:26.449 both accountants. Which is fascinating context, 00:02:26.710 --> 00:02:28.330 isn't it? I mean, think about that environment. 00:02:28.650 --> 00:02:30.569 Yeah. He grew up in a household where numbers 00:02:30.569 --> 00:02:33.270 were the language. You have this Jewish upbringing 00:02:33.270 --> 00:02:36.389 in Queens in the 60s and 70s, parents who understand 00:02:36.389 --> 00:02:39.009 the ledger, who understand profit and loss, liabilities 00:02:39.009 --> 00:02:41.569 and assets. You have to wonder how much of that 00:02:41.569 --> 00:02:45.370 financial literacy was just osmosis. He wasn't 00:02:45.370 --> 00:02:46.610 learning this from the street. He was probably 00:02:46.610 --> 00:02:48.789 learning it at the dinner table. And clearly, 00:02:48.870 --> 00:02:52.689 the entrepreneurial itch started early. I love 00:02:52.689 --> 00:02:54.530 this story from the source material, but I also 00:02:54.530 --> 00:02:56.729 want to scrutinize it a bit. So between high 00:02:56.729 --> 00:02:59.550 school and college, Belfort and a childhood friend, 00:02:59.810 --> 00:03:01.949 Elliot Lowenstern, they decide they're going 00:03:01.949 --> 00:03:04.530 to hustle. They head out to Jones Beach. A classic 00:03:04.530 --> 00:03:07.370 New York summer spot. A classic. And they aren't 00:03:07.370 --> 00:03:09.490 just hanging out. They are selling scooped Italian 00:03:09.490 --> 00:03:13.550 ice from styrofoam coolers. Now, the source says 00:03:13.550 --> 00:03:17.759 they made $20 ,000. In a single summer. Okay, 00:03:17.819 --> 00:03:19.419 let's just pause and do the math on that because 00:03:19.419 --> 00:03:21.500 that number sounds insane for a couple of teenagers. 00:03:21.680 --> 00:03:25.000 It does. We are talking about the early 1980s. 00:03:26.020 --> 00:03:29.680 Adjusted for inflation, that $20 ,000 back then 00:03:29.680 --> 00:03:33.000 is roughly equivalent to nearly $75 ,000 today. 00:03:33.439 --> 00:03:36.319 That is a staggering amount of cash for two kids 00:03:36.319 --> 00:03:39.240 on a beach. Right. I mean, when I was a teenager, 00:03:39.539 --> 00:03:42.099 a summer job meant making minimum wage bagging 00:03:42.099 --> 00:03:44.080 groceries. Yeah. Maybe you'll walk away with 00:03:44.080 --> 00:03:46.689 a couple grand if you're lucky. These two walked 00:03:46.689 --> 00:03:48.669 away with the equivalent of a mid -level corporate 00:03:48.669 --> 00:03:51.569 salary. How is that even physically possible? 00:03:51.770 --> 00:03:54.530 I know. Were they selling the ice for $50 a scoop? 00:03:54.729 --> 00:03:56.990 What was going on? It's a volume game, and it's 00:03:56.990 --> 00:03:59.780 a territory game. If we really analyze this, 00:03:59.919 --> 00:04:02.979 it's the first real sign of his sales DNA. It 00:04:02.979 --> 00:04:05.240 implies a few things. One, they weren't just 00:04:05.240 --> 00:04:07.659 selling a product. They were exploiting a captive 00:04:07.659 --> 00:04:10.060 market. Okay. You have hot people on a beach, 00:04:10.120 --> 00:04:12.939 dehydrated, looking for sugar. The demand is, 00:04:13.000 --> 00:04:15.979 you know, it's inelastic. Two, to move that much 00:04:15.979 --> 00:04:18.120 product, we're talking thousands and thousands 00:04:18.120 --> 00:04:21.199 of scoops, requires serious logistics. I hadn't 00:04:21.199 --> 00:04:23.279 even thought of that part. You have to keep the 00:04:23.279 --> 00:04:25.980 ice frozen in styrofoam coolers in the baking 00:04:25.980 --> 00:04:28.360 sun. You have to transport it. You have to hustle 00:04:28.360 --> 00:04:30.959 up and down the sand. It establishes that he 00:04:30.959 --> 00:04:33.660 wasn't afraid of the grind. Not at all. Carrying 00:04:33.660 --> 00:04:36.160 styrofoam coolers up and down Jones Beach isn't 00:04:36.160 --> 00:04:38.920 glamorous work. It's heavy. It's messy. But the 00:04:38.920 --> 00:04:42.120 margin was clearly there. Exactly. And it highlights 00:04:42.120 --> 00:04:44.399 his ability to spot a gap. It wasn't about the 00:04:44.399 --> 00:04:45.879 Italian ice itself. He didn't care about the 00:04:45.879 --> 00:04:48.040 culinary quality of it. No. It was about the 00:04:48.040 --> 00:04:51.980 arbitrage. Buy low, sell high, high volume. That 00:04:51.980 --> 00:04:53.980 is the blueprint for everything that comes later. 00:04:54.180 --> 00:04:57.060 So he has this pile of cash, this small fortune. 00:04:57.480 --> 00:05:00.899 For a kid his age. And he heads to American University, 00:05:01.240 --> 00:05:03.579 gets a degree in biology, believe it or not. 00:05:03.699 --> 00:05:06.019 Which is a surprise to a lot of people who just 00:05:06.019 --> 00:05:09.319 assume he studied finance or economics or something. 00:05:09.420 --> 00:05:11.759 Right. But then comes the pivot that changes 00:05:11.759 --> 00:05:14.319 everything. He takes that Italian ice money, 00:05:14.420 --> 00:05:16.439 and he enrolls in the University of Maryland 00:05:16.439 --> 00:05:19.740 School of Dentistry. He had a plan. He did. But 00:05:19.740 --> 00:05:21.600 this is where the story takes a really sharp 00:05:21.600 --> 00:05:24.139 left turn, and I want to get your take on whether 00:05:24.139 --> 00:05:27.100 this sounds like a true story or a wolf embellishment. 00:05:27.160 --> 00:05:29.579 Okay, let's hear it. It's day one at dental school. 00:05:30.519 --> 00:05:33.079 The dean gives the welcoming speech to the incoming 00:05:33.079 --> 00:05:36.100 class, and he says, and I'm quoting the source 00:05:36.100 --> 00:05:39.759 here, the golden age of dentistry is over. If 00:05:39.759 --> 00:05:41.360 you're here simply because you're looking to 00:05:41.360 --> 00:05:43.740 make a lot of money, you're in the wrong place. 00:05:43.819 --> 00:05:46.040 That is the legendary quote. Belford hears this 00:05:46.040 --> 00:05:49.060 and he drops out. Immediately. It's a very cinematic 00:05:49.060 --> 00:05:51.459 moment, isn't it? It feels almost too perfect. 00:05:51.819 --> 00:05:53.459 Yeah. I walked out the door right then and there. 00:05:54.120 --> 00:05:56.379 Do we buy that? Did it happen exactly like that? 00:05:56.579 --> 00:05:58.639 Well, you know, whether it happened that dramatically 00:05:58.639 --> 00:06:00.579 or whether it took him a week to process it, 00:06:00.639 --> 00:06:03.220 the outcome is the verified fact. True. He did 00:06:03.220 --> 00:06:06.519 drop out almost immediately. And I think even 00:06:06.519 --> 00:06:09.160 if he polished the anecdote for the book, the 00:06:09.160 --> 00:06:12.370 psychology behind it is real. How so? Most people 00:06:12.370 --> 00:06:15.209 go to dental school because they want to be dentists 00:06:15.209 --> 00:06:17.089 or they want the prestige or they have some desire 00:06:17.089 --> 00:06:20.490 to help people. For Belfort, the career was purely 00:06:20.490 --> 00:06:23.569 a vehicle. It was a vehicle for a financial outcome. 00:06:23.730 --> 00:06:26.029 Right. It was just a means to an end. Once the 00:06:26.029 --> 00:06:28.750 dean removed the promise of making a lot of money, 00:06:28.889 --> 00:06:31.730 the vehicle was useless to him. It's like buying 00:06:31.730 --> 00:06:33.550 a car to win a race and then finding out the 00:06:33.550 --> 00:06:35.370 car has no engine. You don't just sit in it. 00:06:35.410 --> 00:06:38.329 You get out. It crystallizes his motivation perfectly. 00:06:38.550 --> 00:06:40.910 It wasn't about the work. It was about the wealth. 00:06:41.670 --> 00:06:45.670 So dentistry is out. What does he do next? He 00:06:45.670 --> 00:06:48.829 goes into sales. Specifically, door -to -door 00:06:48.829 --> 00:06:51.829 meat and seafood on Long Island. This is the 00:06:51.829 --> 00:06:54.829 first legitimate adult business venture we see 00:06:54.829 --> 00:06:56.790 in the records. And again, look at the pattern. 00:06:56.850 --> 00:06:59.550 He creates a business called the Meat and Seafood 00:06:59.550 --> 00:07:02.750 Business. Not a very creative name. No, but descriptive. 00:07:03.069 --> 00:07:05.310 And he doesn't just sell a few steaks to housewives 00:07:05.310 --> 00:07:08.189 here and there. He scales it. He scales it aggressively. 00:07:08.389 --> 00:07:10.829 He claims he grew this business to employ several 00:07:10.829 --> 00:07:14.350 workers. They were moving 5 ,000 pounds of beef 00:07:14.350 --> 00:07:18.250 and fish a week. Let's just contextualize 5 ,000 00:07:18.250 --> 00:07:20.970 pounds. Please. That is two and a half tons of 00:07:20.970 --> 00:07:24.980 perishable product. Right. Weekly. In the 1980s, 00:07:24.980 --> 00:07:26.980 this isn't clicking a button on an app to order 00:07:26.980 --> 00:07:29.500 more inventory. No. This is physical inventory. 00:07:29.560 --> 00:07:31.600 You need trucks, you need freezers, you need 00:07:31.600 --> 00:07:33.699 drivers. And you need to sell it before it spoils. 00:07:33.980 --> 00:07:36.259 Precisely. It is a high -pressure logistical 00:07:36.259 --> 00:07:38.480 nightmare. And he's doing this door to door. 00:07:38.680 --> 00:07:41.240 But here's the foreshadowing. He scales it up, 00:07:41.300 --> 00:07:44.220 moving massive volume, and then it collapses. 00:07:44.500 --> 00:07:47.019 Poof. He falls for bankruptcy at age 25. Why 00:07:47.019 --> 00:07:48.259 do you think that happened? What went wrong? 00:07:48.779 --> 00:07:50.939 Well, looking at the retrospective analysis, 00:07:51.399 --> 00:07:54.899 it really suggests a focus on aggressive expansion 00:07:54.899 --> 00:07:59.339 sales, sales, sales without the underlying capital 00:07:59.339 --> 00:08:02.220 structure to support it. So selling faster than 00:08:02.220 --> 00:08:04.899 he could actually manage. Exactly. He was likely 00:08:04.899 --> 00:08:08.000 extending credit to customers or buying inventory 00:08:08.000 --> 00:08:10.040 on credit that he couldn't pay back fast enough. 00:08:10.100 --> 00:08:13.399 It establishes this boom and bust cycle, rapid 00:08:13.399 --> 00:08:15.699 scaling, followed by a total crash. And he was 00:08:15.699 --> 00:08:19.019 25 years old. and already bankrupt. That could 00:08:19.019 --> 00:08:20.660 have been the end of the story for a lot of people. 00:08:20.720 --> 00:08:23.300 It's a humiliating failure. You're back at square 00:08:23.300 --> 00:08:25.959 one. But for Belfour, it seems like it was just 00:08:25.959 --> 00:08:28.639 the warm -up. Uh -huh. So he's broke, he's 25, 00:08:29.040 --> 00:08:31.959 a family friend pulls some strings and gets him 00:08:31.959 --> 00:08:35.019 a trainee job at L .F. Rothschild, a real, you 00:08:35.019 --> 00:08:37.480 know, blue -blooded Wall Street firm. Finally, 00:08:37.480 --> 00:08:39.940 he is in the arena. But talk about bad timing. 00:08:40.100 --> 00:08:41.799 He gets there, he starts trading, he's ready 00:08:41.799 --> 00:08:43.320 to become a master of the universe, and then 00:08:43.320 --> 00:08:46.840 wham! Black Monday. The stock market crash of 00:08:46.840 --> 00:08:51.019 1987. Right. October 19, 1987. The biggest one 00:08:51.019 --> 00:08:53.080 -day percentage drop in stock market history. 00:08:53.279 --> 00:08:57.679 The Dow dropped 22 .6%. It was just chaos. It 00:08:57.679 --> 00:09:00.600 was. And L .F. Rothschild was hit hard. I mean, 00:09:00.600 --> 00:09:02.419 really hard. They started laying people off left 00:09:02.419 --> 00:09:04.799 and right. And Belfort. Being the low man on 00:09:04.799 --> 00:09:06.580 the totem pole was laid off almost immediately. 00:09:06.919 --> 00:09:09.899 So the universe is really testing him here. Dentistry? 00:09:10.059 --> 00:09:15.320 No. Meat business. Bankrupt. Wall Street. The 00:09:15.320 --> 00:09:18.019 market literally crashes the moment he arrives. 00:09:18.240 --> 00:09:21.000 But this is the crucial pivot point. This is 00:09:21.000 --> 00:09:23.940 where the wolf is actually born. How so? Because 00:09:23.940 --> 00:09:26.360 he can't play in the big leagues anymore. The 00:09:26.360 --> 00:09:29.100 big leagues are bleeding. L .F. Rothschild isn't 00:09:29.100 --> 00:09:32.379 hiring. Goldman isn't hiring. So he looks at 00:09:32.379 --> 00:09:35.639 the underbelly. He finds a job at a small brokerage 00:09:35.639 --> 00:09:38.340 center on Long Island selling penny stocks. And 00:09:38.340 --> 00:09:40.059 this leads to the founding of Stratton Oakmont. 00:09:40.360 --> 00:09:42.220 Now, originally, this was a franchise of something 00:09:42.220 --> 00:09:44.700 called Stratton Securities, right? It wasn't 00:09:44.700 --> 00:09:47.240 his name to start. Correct. He started as a franchisee, 00:09:47.240 --> 00:09:49.019 which is an interesting detail. He didn't invent 00:09:49.019 --> 00:09:51.460 the name immediately, but eventually he buys 00:09:51.460 --> 00:09:53.659 out the original founder and makes it his own. 00:09:53.899 --> 00:09:56.039 And this is where we need to explain what Stratton 00:09:56.039 --> 00:09:58.639 Oakmont actually was. Yes. Because in the movie, 00:09:58.659 --> 00:10:00.679 it just looks like a chaotic party where people 00:10:00.679 --> 00:10:03.500 are screaming into phones. But structurally, 00:10:03.679 --> 00:10:05.919 it was a boiler room. Let's break that down for 00:10:05.919 --> 00:10:07.500 the listener who might hear that term but not 00:10:07.500 --> 00:10:10.950 know the mechanics. What is a boiler room specifically? 00:10:11.269 --> 00:10:14.870 A boiler room is basically an outbound call center 00:10:14.870 --> 00:10:18.309 that sells questionable investments using high 00:10:18.309 --> 00:10:21.269 pressure sales tactics. They are literally turning 00:10:21.269 --> 00:10:23.919 up the heat on the investor. The term refers 00:10:23.919 --> 00:10:26.039 to the high pressure environment and often the 00:10:26.039 --> 00:10:29.080 physical location. Originally, these scams were 00:10:29.080 --> 00:10:31.700 run out of cheap basement offices, you know, 00:10:31.700 --> 00:10:34.220 near the boiler room of a building. And Stratton 00:10:34.220 --> 00:10:36.620 Oakmont specialized in marketing penny stocks. 00:10:36.919 --> 00:10:39.779 Right. Penny stocks are shares of very small 00:10:39.779 --> 00:10:42.200 public companies that trade at very low prices, 00:10:42.299 --> 00:10:44.860 usually under five dollars a share. They're highly 00:10:44.860 --> 00:10:47.960 volatile, thinly traded and very easy to manipulate 00:10:47.960 --> 00:10:50.059 because there isn't much public information about 00:10:50.059 --> 00:10:52.000 them. And the specific fraud they were running 00:10:52.000 --> 00:10:54.740 is. known as pump and dump i want to walk through 00:10:54.740 --> 00:10:56.879 this step by step so we understand exactly how 00:10:56.879 --> 00:10:59.320 the theft happened okay let's look at the mechanism 00:10:59.320 --> 00:11:01.659 described in the text it starts with the setup 00:11:01.659 --> 00:11:04.940 belfort and his partners stratton oakmont would 00:11:04.940 --> 00:11:08.500 acquire a huge position in a cheap stock sometimes 00:11:08.500 --> 00:11:10.960 they would control nearly the entire supply of 00:11:10.960 --> 00:11:13.159 the stock through what are called nominee accounts 00:11:13.159 --> 00:11:16.370 or rat holes rat holes that sounds pleasant It 00:11:16.370 --> 00:11:18.929 means they own the stock, but it's hidden in 00:11:18.929 --> 00:11:21.330 accounts under other people's names, so it doesn't 00:11:21.330 --> 00:11:23.009 look like Stratton Oakmont owns it all. Got it. 00:11:23.210 --> 00:11:26.950 That's step one. Step two is the pump. Belfort's 00:11:26.950 --> 00:11:29.330 army of brokers gets on the phones. And they 00:11:29.330 --> 00:11:31.190 had a very specific script for this, didn't they? 00:11:31.250 --> 00:11:34.190 I read about the Kodak pitch. This is the genius 00:11:34.190 --> 00:11:37.009 and the evil of the sales tactic. They wouldn't 00:11:37.009 --> 00:11:39.370 start by selling the garbage stock. They would 00:11:39.370 --> 00:11:42.210 call a potential client, often a blue -collar 00:11:42.210 --> 00:11:44.929 guy or a small business owner, and pitch a blue 00:11:44.929 --> 00:11:48.240 -chip stock. Something safe like Kodak or IBM 00:11:48.240 --> 00:11:53.200 or Disney. Mr. Smith, Kodak is poised for a breakout. 00:11:53.500 --> 00:11:55.759 Why do that? Why sell a legitimate stock first? 00:11:55.980 --> 00:11:58.480 To build trust. It's brilliant in a sinister 00:11:58.480 --> 00:12:01.080 way. If you buy Kodak and it goes up a few bucks, 00:12:01.159 --> 00:12:02.879 you think, hey, this broker knows his stuff. 00:12:03.000 --> 00:12:05.960 You trust him. You think he's on your side. Belfort 00:12:05.960 --> 00:12:08.139 called this papering the client. So once the 00:12:08.139 --> 00:12:10.700 client is papered and trusts the broker, then 00:12:10.700 --> 00:12:13.919 comes the switch. Exactly. Then comes the call 00:12:13.919 --> 00:12:16.840 for the house stock. the garbage penny stock 00:12:16.840 --> 00:12:19.840 that Stratton Oakmont secretly owns. The broker 00:12:19.840 --> 00:12:23.259 calls back breathless with excitement. Mr. Smith, 00:12:23.419 --> 00:12:26.019 I have something incredible. It's a small company. 00:12:26.080 --> 00:12:28.320 It's about to explode, but you have to move now. 00:12:28.500 --> 00:12:31.879 That urgency, the scarcity. It's classic psychological 00:12:31.879 --> 00:12:35.120 manipulation. The client, who now trusts the 00:12:35.120 --> 00:12:38.080 broker, dumps his savings into this penny stock. 00:12:38.360 --> 00:12:41.450 And that's the bump. The price of the stock skyrockets 00:12:41.450 --> 00:12:43.389 because of this artificial demand created by 00:12:43.389 --> 00:12:45.909 the call center. And then? Then comes the dump. 00:12:46.250 --> 00:12:49.029 Once the price hits a peak, Stratton Oakmont 00:12:49.029 --> 00:12:51.509 and Belfort personally sell off their hidden 00:12:51.509 --> 00:12:54.450 holdings. They dump millions of shares into the 00:12:54.450 --> 00:12:56.870 market. Which kills the price. It obliterates 00:12:56.870 --> 00:12:59.289 it. The supply floods the market. The price crashes 00:12:59.289 --> 00:13:01.909 to zero. Belfort walks away with millions in 00:13:01.909 --> 00:13:05.419 cash. The investors, Mr. Smith in Ohio, the retiree 00:13:05.419 --> 00:13:08.419 in Florida, are left holding stock that is literally 00:13:08.419 --> 00:13:10.679 worthless. They lose everything. It's a direct 00:13:10.679 --> 00:13:13.360 transfer of wealth from the gullible to the manipulator. 00:13:13.460 --> 00:13:16.399 Correct. And the scale of this was unbelievable. 00:13:17.019 --> 00:13:19.480 The source says at one point, Stratton Oakmont 00:13:19.480 --> 00:13:22.820 employed over one... thousand stockbrokers. A 00:13:22.820 --> 00:13:26.019 thousand brokers. Imagine the noise in that room. 00:13:26.100 --> 00:13:28.179 Imagine the energy required to keep a thousand 00:13:28.179 --> 00:13:30.860 people lying on the phone all day. And they were 00:13:30.860 --> 00:13:33.580 involved in stock issues totaling over a billion 00:13:33.580 --> 00:13:37.480 dollars. A billion with a B. Including, famously, 00:13:37.659 --> 00:13:40.259 the IPO for Steve Madden Footwear. That was their 00:13:40.259 --> 00:13:43.159 crown jewel. Steve Madden was a legitimate company. 00:13:43.200 --> 00:13:45.840 They actually made shoes. Taking them public 00:13:45.840 --> 00:13:48.139 gave Stratton Oakmont a veneer of credibility. 00:13:48.460 --> 00:13:51.559 Right. Look, we aren't just selling penny stocks. 00:13:51.740 --> 00:13:54.460 We took Steve Madden public. But even that IPO 00:13:54.460 --> 00:13:57.159 was manipulated behind the scenes to ensure Belfer 00:13:57.159 --> 00:13:59.480 and his cronies controlled the share price from 00:13:59.480 --> 00:14:01.720 the jump. Now we have to talk about the culture 00:14:01.720 --> 00:14:04.200 that fueled this. Because you can't have a thousand 00:14:04.200 --> 00:14:06.100 young men ripping people off all day without 00:14:06.100 --> 00:14:08.320 a certain atmosphere. Oh yeah. The source material 00:14:08.320 --> 00:14:10.620 describes a life of lavish parties and intensive 00:14:10.620 --> 00:14:14.299 use of recreational drugs. Specifically methaqualone. 00:14:14.779 --> 00:14:17.039 Qualudes. The source mentions his addiction to 00:14:17.039 --> 00:14:19.970 qualudes explicitly. And this is where the movie 00:14:19.970 --> 00:14:22.409 leans in heavily. But from an analytical perspective, 00:14:22.570 --> 00:14:25.389 we have to look at what that drug does. Qualudes 00:14:25.389 --> 00:14:28.350 are a sedative hypnotic. They lower inhibitions. 00:14:28.370 --> 00:14:30.809 They make you feel invincible. They numb the 00:14:30.809 --> 00:14:32.830 moral center. Is that a fair way to put it? In 00:14:32.830 --> 00:14:36.309 a way, yes. When you are operating a billion 00:14:36.309 --> 00:14:38.710 dollar fraud while addicted to heavy sedatives, 00:14:38.909 --> 00:14:41.690 your risk assessment is completely broken. Yeah. 00:14:42.090 --> 00:14:44.269 You stop worrying about the SEC. You stop worrying 00:14:44.269 --> 00:14:47.289 about the FBI. You feel like a god. That drug 00:14:47.289 --> 00:14:49.669 -fueled invincibility likely accelerated the 00:14:49.669 --> 00:14:52.169 fraud. It pushed them to be more brazen, more 00:14:52.169 --> 00:14:54.629 reckless. So you have this boiler room. You have 00:14:54.629 --> 00:14:56.350 a thousand brokers. You have drugs. You have 00:14:56.350 --> 00:14:59.110 money pouring in. But you also have eyes on you. 00:14:59.330 --> 00:15:02.370 The government isn't blind. The regulatory cat 00:15:02.370 --> 00:15:04.330 and mouse game had to begin. The source says 00:15:04.330 --> 00:15:06.570 Stratton Oakmont was under near constant scrutiny. 00:15:07.049 --> 00:15:09.870 from the NSD, which is now Fine RA, from 1989 00:15:09.870 --> 00:15:12.570 onward. That is almost the entire existence of 00:15:12.570 --> 00:15:14.629 the firm. It was. They were fighting regulators 00:15:14.629 --> 00:15:17.570 constantly. Belfort spent a fortune on lawyers 00:15:17.570 --> 00:15:20.610 to delay, to obfuscate, to pay fines and just 00:15:20.610 --> 00:15:23.450 keep going. But the wheels finally fell off in 00:15:23.450 --> 00:15:27.690 December 1996. The NASD expelled Stratton Oakmont. 00:15:27.850 --> 00:15:29.750 They effectively put the firm out of business. 00:15:30.029 --> 00:15:32.610 But the criminal charges took a bit longer. It 00:15:32.610 --> 00:15:35.490 wasn't until 1999 that Belfort was indicted for 00:15:35.490 --> 00:15:37.669 securities fraud and money laundering. And this 00:15:37.669 --> 00:15:40.250 leads to the next major pivot in his life. The 00:15:40.250 --> 00:15:42.909 pivot from wolf to rat, if you want to use the 00:15:42.909 --> 00:15:45.649 street terminology. Because in the movies, not 00:15:45.649 --> 00:15:47.769 just the Belfort movie, but crime movies in general, 00:15:47.909 --> 00:15:51.289 there's this code of silence. Omerta, you don't 00:15:51.289 --> 00:15:53.940 snitch. You do your time. That is not what happened 00:15:53.940 --> 00:15:55.879 here. Not at all. Not at all. The source material 00:15:55.879 --> 00:15:59.539 is very clear. Jordan Belfort became an FBI informant. 00:15:59.639 --> 00:16:01.679 He didn't just talk. He wore a wire. He wore 00:16:01.679 --> 00:16:04.519 a wire against his partners and associates. He 00:16:04.519 --> 00:16:06.799 gathered evidence. He testified against them. 00:16:07.019 --> 00:16:08.899 I just want to pause on the reality of that for 00:16:08.899 --> 00:16:12.279 a second. Wearing a wire isn't simple. You are 00:16:12.279 --> 00:16:15.399 walking into a room with your best friends, people 00:16:15.399 --> 00:16:18.320 you have partied with, done drugs with, committed 00:16:18.320 --> 00:16:21.639 crimes with. And you're actively recording them 00:16:21.639 --> 00:16:23.960 to send them to prison. It's a profound betrayal. 00:16:24.860 --> 00:16:28.320 But it's also, it's a rational calculation. Hell 00:16:28.320 --> 00:16:30.899 so. Belfort is a salesman. He deals in transactions. 00:16:31.220 --> 00:16:34.379 The deal on the table from the FBI was, you are 00:16:34.379 --> 00:16:37.320 looking at 20 or 30 years in prison. Yeah. Give 00:16:37.320 --> 00:16:39.399 us everyone else and we will give you a discount. 00:16:39.899 --> 00:16:42.379 And he took the deal. He did the math. He realized 00:16:42.379 --> 00:16:45.399 his friends were a depreciating asset, and his 00:16:45.399 --> 00:16:47.320 freedom was the only thing that mattered. He 00:16:47.320 --> 00:16:49.440 sold out his friends to buy his freedom. And 00:16:49.440 --> 00:16:51.700 the discount was significant. Let's look at the 00:16:51.700 --> 00:16:53.980 sentence. He was sentenced to four years. Which, 00:16:54.059 --> 00:16:56.620 for a fraud of this magnitude, investor losses 00:16:56.620 --> 00:16:59.820 estimated at $200 million is remarkably light. 00:16:59.980 --> 00:17:01.980 It's nothing. There are people serving longer 00:17:01.980 --> 00:17:04.140 sentences for selling small amounts of marijuana. 00:17:04.460 --> 00:17:06.420 But he didn't even serve the four years. No, 00:17:06.539 --> 00:17:10.630 he served 22 months. 22 months. He did less than 00:17:10.630 --> 00:17:14.289 two years for a $200 million fraud. At the Taft 00:17:14.289 --> 00:17:16.650 Correctional Institution in California. And let's 00:17:16.650 --> 00:17:19.089 be clear about Taft. This isn't Rikers Island. 00:17:19.390 --> 00:17:22.450 No, it's often referred to as club fed. It's 00:17:22.450 --> 00:17:24.690 a low security camp, no bars on the windows, 00:17:24.829 --> 00:17:28.210 dorm style living. But still, it is a loss of 00:17:28.210 --> 00:17:30.509 freedom. And this is where the story gets really 00:17:30.509 --> 00:17:33.250 weird. Because you think, okay, he's in prison, 00:17:33.349 --> 00:17:36.839 he's disgraced, the party is over. But even in 00:17:36.839 --> 00:17:40.160 prison, the universe throws him a lifeline. Or 00:17:40.160 --> 00:17:42.319 rather, a cellmate. This is one of those facts 00:17:42.319 --> 00:17:44.480 that if you wrote it in a screenplay, a producer 00:17:44.480 --> 00:17:46.500 would tell you to cut it because it's too unbelievable. 00:17:46.980 --> 00:17:50.000 Right. His cellmate was Tommy Chong. As in Cheech 00:17:50.000 --> 00:17:52.619 and Chong, the guy from Up in Smoke? The stoner 00:17:52.619 --> 00:17:55.819 comedy icon. Chong was in there for a paraphernalia 00:17:55.819 --> 00:17:58.099 charge -selling bongs online, essentially. Which 00:17:58.099 --> 00:18:00.160 was a huge controversy at the time. So you have 00:18:00.160 --> 00:18:02.000 the Wolf of Wall Street and Tommy Chong sharing 00:18:02.000 --> 00:18:04.380 a bunk in California. And they're swapping stories. 00:18:05.000 --> 00:18:07.700 I'd love to have been a fly on that wall. Exactly. 00:18:08.279 --> 00:18:10.700 Belfort is telling these wild tales about the 00:18:10.700 --> 00:18:13.000 midget tossing, the yacht sinking, the drugs, 00:18:13.119 --> 00:18:16.660 and Chong is just listening. And Chong is the 00:18:16.660 --> 00:18:18.380 one who says, hey, you should write this down. 00:18:18.759 --> 00:18:21.720 Chong told him, this is a book. You are a natural 00:18:21.720 --> 00:18:23.960 storyteller. You need to write your memoirs. 00:18:24.140 --> 00:18:26.619 Chong basically coached him into his next career. 00:18:26.880 --> 00:18:29.660 So Belfort starts writing. The source says he 00:18:29.660 --> 00:18:33.440 actually wrote and destroyed 130 pages at first, 00:18:33.539 --> 00:18:36.390 a false start. He tried to write it like a novel, 00:18:36.450 --> 00:18:39.970 and it was bad. But eventually, he finds his 00:18:39.970 --> 00:18:42.890 voice. He produces The Wolf of Wall Street and 00:18:42.890 --> 00:18:44.769 Catching the Wolf of Wall Street. And the commercial 00:18:44.769 --> 00:18:47.390 instinct kicks in again. These books were published 00:18:47.390 --> 00:18:50.789 in roughly 40 countries, translated into 18 languages. 00:18:51.109 --> 00:18:53.710 And here's the kicker. A bidding war for the 00:18:53.710 --> 00:18:56.549 film rights began before the first book was even 00:18:56.549 --> 00:18:58.490 released. He hadn't even published the book yet 00:18:58.490 --> 00:19:01.190 and Hollywood was already throwing money at him. 00:19:01.309 --> 00:19:03.450 Wow. It just shows the undeniable appeal of the 00:19:03.450 --> 00:19:06.309 story. Studios and new audiences would eat up 00:19:06.309 --> 00:19:08.710 this tale of debauchery. But we have to pause 00:19:08.710 --> 00:19:11.190 here and look at the fact versus fiction aspect. 00:19:11.990 --> 00:19:15.089 Because Belfort is the narrator of his own life. 00:19:15.809 --> 00:19:19.690 And he has a history of, let's call it, creative 00:19:19.690 --> 00:19:22.529 truth. He is a notoriously unreliable narrator. 00:19:22.809 --> 00:19:25.289 The former federal prosecutor who led the investigation 00:19:25.289 --> 00:19:28.309 is quoted in our source material. He said that 00:19:28.309 --> 00:19:31.490 Belfer invented much and aggrandized his importance. 00:19:31.710 --> 00:19:34.029 Aggrandized his importance? The man who calls 00:19:34.029 --> 00:19:36.440 himself the wolf. I'm shocked. Chuckles. Right. 00:19:37.039 --> 00:19:40.220 But the prosecutor's point is crucial. He emphasized 00:19:40.220 --> 00:19:42.480 that the real story isn't just the parties and 00:19:42.480 --> 00:19:45.119 the fun. It involves thousands of victims who 00:19:45.119 --> 00:19:47.579 lost their savings. Yeah. When we get swept up 00:19:47.579 --> 00:19:49.740 in the narrative of the wolf, we forget the sheep, 00:19:49.859 --> 00:19:52.079 the people who got slaughtered financially. The 00:19:52.079 --> 00:19:54.920 book makes it funny. The reality was tragic for 00:19:54.920 --> 00:19:57.240 the victims. That is a perfect segue into the 00:19:57.240 --> 00:19:59.440 money trail because part of his sentence wasn't 00:19:59.440 --> 00:20:01.940 just time. It was restitution. He was ordered 00:20:01.940 --> 00:20:05.819 to pay back $110 .4 million to his victims. victims. 00:20:05.839 --> 00:20:07.880 Correct. That was the legal debt. So let's look 00:20:07.880 --> 00:20:11.000 at the scorecard. As of 2013, which is years 00:20:11.000 --> 00:20:13.759 after his release, how much had the victims recovered? 00:20:14.059 --> 00:20:17.480 About $10 million. Out of $110 million. That 00:20:17.480 --> 00:20:19.960 is less than 10%. And most of that $10 million 00:20:19.960 --> 00:20:22.640 didn't come from Belfort writing checks. It came 00:20:22.640 --> 00:20:24.799 from the sale of forfeited properties, houses, 00:20:24.920 --> 00:20:28.559 cars that the government seized early on. It 00:20:28.559 --> 00:20:30.900 wasn't coming from his new income. This brings 00:20:30.900 --> 00:20:34.769 us to the 50 % dispute. This is a legal battle 00:20:34.769 --> 00:20:37.430 that really highlights how Belfort operates. 00:20:37.809 --> 00:20:40.089 I want to dive into the legalese here because 00:20:40.089 --> 00:20:42.809 it shows his mindset. It does. So his original 00:20:42.809 --> 00:20:45.509 sentencing agreement stated he had to pay 50 00:20:45.509 --> 00:20:48.730 % of his gross income toward restitution. That 00:20:48.730 --> 00:20:50.650 sounds like a lot, right? Half of everything 00:20:50.650 --> 00:20:52.769 you make goes to the victims. Right. If you make 00:20:52.769 --> 00:20:55.430 a million, the victims get $500 ,000. Seems fair. 00:20:55.750 --> 00:20:59.210 But in 2013, federal prosecutors filed a complaint 00:20:59.210 --> 00:21:02.029 saying he was in default. They claimed he wasn't 00:21:02.029 --> 00:21:05.470 paying. And Belford's lawyers had a very technical 00:21:05.470 --> 00:21:08.569 argument. A very technical argument. They argued 00:21:08.569 --> 00:21:11.210 that the 50 % requirement was only valid during 00:21:11.210 --> 00:21:13.890 his parole. Technically, it's called supervised 00:21:13.890 --> 00:21:17.250 release. His supervised release ended in 2009. 00:21:17.930 --> 00:21:21.250 Therefore, his lawyers argued, once that supervision 00:21:21.250 --> 00:21:24.269 period ended, the contractual obligation to pay 00:21:24.269 --> 00:21:29.319 50 % That is bold. I'm off parole, so I don't 00:21:29.319 --> 00:21:31.359 have to give you half my money anymore, even 00:21:31.359 --> 00:21:34.039 though I still owe $100 million. It's legalistic 00:21:34.039 --> 00:21:38.160 jujitsu. And the judge agreed, or at least ruled, 00:21:38.279 --> 00:21:41.480 that the specific 50 % requirement had expired. 00:21:42.170 --> 00:21:44.490 with the supervision, so they had to strike a 00:21:44.490 --> 00:21:46.670 new deal. What was the new deal? He has to pay 00:21:46.670 --> 00:21:50.369 a minimum of $10 ,000 per month for life. $10 00:21:50.369 --> 00:21:52.269 ,000 a month. Now, for the average listener, 00:21:52.450 --> 00:21:55.009 $10 ,000 a month is a huge amount of money. Sure. 00:21:55.170 --> 00:21:57.450 But for a guy who claims to make millions in 00:21:57.450 --> 00:22:00.710 speaking fees, it's a drop in the bucket. Let's 00:22:00.710 --> 00:22:03.950 do the math. $10 ,000 a month is $120 ,000 a 00:22:03.950 --> 00:22:06.160 year. To pay off the remaining $100 million, 00:22:06.380 --> 00:22:10.599 it would take roughly 833 years. So the victims 00:22:10.599 --> 00:22:12.880 are never getting that money back. Mathematically, 00:22:13.000 --> 00:22:15.960 no. Unless he voluntarily writes a check for 00:22:15.960 --> 00:22:19.480 $100 million, the victims are out of luck. And 00:22:19.480 --> 00:22:21.420 there was also a controversy regarding the movie 00:22:21.420 --> 00:22:24.329 Royalties, right? I remember seeing him claim 00:22:24.329 --> 00:22:26.950 he was giving all the money to the victims. He 00:22:26.950 --> 00:22:30.049 went on TV and said it. He did claim that. On 00:22:30.049 --> 00:22:32.549 his website, on Facebook, in interviews, he said, 00:22:32.630 --> 00:22:35.250 I am not making a dime from the movie or the 00:22:35.250 --> 00:22:39.089 books. I am turning over 100 % of the royalties 00:22:39.089 --> 00:22:41.930 to the victims. That sounds noble. That sounds 00:22:41.930 --> 00:22:44.700 like redemption. It does. But the U .S. attorney 00:22:44.700 --> 00:22:47.599 stepped in and filed documents saying that claim 00:22:47.599 --> 00:22:51.819 was not factual. They pointed out that he had 00:22:51.819 --> 00:22:54.039 received money from the initial sale of the film 00:22:54.039 --> 00:22:56.920 rights and kept it. Businessweek had a report 00:22:56.920 --> 00:22:59.220 on this that was pretty damning. Yes. They reported 00:22:59.220 --> 00:23:01.200 that before the movie release, out of roughly 00:23:01.200 --> 00:23:04.819 $1 .2 million he received, he had paid only $21 00:23:04.819 --> 00:23:09.420 ,000 toward restitution. $21 ,000 out of $1 .2 00:23:09.420 --> 00:23:12.289 million. That's not even 50%. That's not even 00:23:12.289 --> 00:23:15.609 2%. So there is a massive gap between the redemption 00:23:15.609 --> 00:23:17.710 brand, the guy who says I'm giving it all back, 00:23:17.930 --> 00:23:21.210 and the financial reality. He was keeping the 00:23:21.210 --> 00:23:23.829 vast majority of the cash while telling the public 00:23:23.829 --> 00:23:26.710 he was a martyr for his victims. That gap brings 00:23:26.710 --> 00:23:31.390 us to his current career. Reinvention. He didn't 00:23:31.390 --> 00:23:33.990 go hide in a hole. He didn't retire quietly. 00:23:34.599 --> 00:23:36.839 he pivoted to motivational speaking and sales 00:23:36.839 --> 00:23:39.579 training. He became a guru. And markets it as 00:23:39.579 --> 00:23:42.279 Jordan Belfort's straight -line sales psychology. 00:23:42.720 --> 00:23:45.000 Which is incredibly ironic if you think about 00:23:45.000 --> 00:23:47.859 it. He is teaching the straight -line system. 00:23:48.299 --> 00:23:51.140 Is that a new system? Did he invent this post 00:23:51.140 --> 00:23:54.200 -prison? No, that is the exact same sales technique 00:23:54.200 --> 00:23:57.309 he developed at Stratton Oakmont. It is the system 00:23:57.309 --> 00:24:00.630 he used to train those 1 ,000 brokers to defraud 00:24:00.630 --> 00:24:03.549 people. He has repackaged the weapon of the crime 00:24:03.549 --> 00:24:06.269 as a legitimate business tool. And people are 00:24:06.269 --> 00:24:08.750 paying for it. They're paying a lot. His speaking 00:24:08.750 --> 00:24:12.230 fees range from $30 ,000 to $75 ,000 per engagement. 00:24:12.430 --> 00:24:15.329 His sales seminars can cost $80 ,000 or more 00:24:15.329 --> 00:24:18.180 for corporate training. Who is paying that? Who 00:24:18.180 --> 00:24:20.339 hires a convicted fraudster to train their sales 00:24:20.339 --> 00:24:22.680 team? That is the fascinating market question. 00:24:22.880 --> 00:24:25.359 It's a mix. You have aspiring entrepreneurs who 00:24:25.359 --> 00:24:27.579 see his wealth and want the secret. You have 00:24:27.579 --> 00:24:29.539 legitimate companies who think, well, say what 00:24:29.539 --> 00:24:31.440 you want about his ethics. The guy knows how 00:24:31.440 --> 00:24:33.859 to close a deal. They want the technique without 00:24:33.859 --> 00:24:36.240 the jail time. They think they can strip mine 00:24:36.240 --> 00:24:39.160 the skill and leave the fraud behind. It's dangerous 00:24:39.160 --> 00:24:42.000 territory. It is. Because the technique itself, 00:24:42.200 --> 00:24:44.240 the high pressure, the psychological manipulation 00:24:44.240 --> 00:24:47.799 is inherently aggressive. And speaking of dangerous 00:24:47.799 --> 00:24:50.660 territory, the source mentions a scandal in Australia 00:24:50.660 --> 00:24:54.519 that sounds suspiciously familiar. This is something 00:24:54.519 --> 00:24:56.440 that often gets buried under the movie hype. 00:24:56.619 --> 00:24:59.359 This is a really important detail. The Australian 00:24:59.359 --> 00:25:01.900 training scandal. Tell me about this. What happened 00:25:01.900 --> 00:25:05.039 down under? An investigation by 7 News and the 00:25:05.039 --> 00:25:07.099 Sunday Mail in Australia found links between 00:25:07.099 --> 00:25:09.599 Belfort and a company called Face -to -Face Training 00:25:09.599 --> 00:25:12.440 and another called Career Pathways Australia. 00:25:13.279 --> 00:25:15.920 Belfort gave workshops for the staff of these 00:25:15.920 --> 00:25:18.420 companies. He was the brand ambassador. He promoted 00:25:18.420 --> 00:25:20.440 them heavily. And what was the business model 00:25:20.440 --> 00:25:22.339 of these companies? They were vocational training 00:25:22.339 --> 00:25:24.940 companies. In Australia, the government provides 00:25:24.940 --> 00:25:28.220 funding for worker training. Ah, government money. 00:25:28.339 --> 00:25:31.180 Yeah. Always a target. Right. So face to face 00:25:31.180 --> 00:25:33.799 training was receiving millions in state government 00:25:33.799 --> 00:25:37.000 funding to train employees. But the investigation 00:25:37.000 --> 00:25:40.619 alleged that the training never happened. A ghost 00:25:40.619 --> 00:25:43.400 training program. Nine News Australia called 00:25:43.400 --> 00:25:46.119 it a tick and flick scam. Tick and flick. What 00:25:46.119 --> 00:25:48.259 does that mean? You tick the box to say someone 00:25:48.259 --> 00:25:50.640 was trained. You flick the paperwork to the government 00:25:50.640 --> 00:25:53.500 and you collect the check. The employees never 00:25:53.500 --> 00:25:56.519 got the training. But the company got the funding. 00:25:56.740 --> 00:25:58.720 And Belfort was involved with them. He was the 00:25:58.720 --> 00:26:00.759 face of their workshops. He was training the 00:26:00.759 --> 00:26:02.920 people who are running this scheme. Now, to be 00:26:02.920 --> 00:26:05.240 fair, the source doesn't say Belfort was the 00:26:05.240 --> 00:26:07.660 architect or the owner of that specific scam. 00:26:07.880 --> 00:26:10.240 OK, so he wasn't charged with anything. No, he 00:26:10.240 --> 00:26:12.799 wasn't charged, but he was in the orbit of it. 00:26:12.960 --> 00:26:15.640 He was a paid associate of a company accused 00:26:15.640 --> 00:26:18.319 of a multimillion dollar fraud against the government. 00:26:18.559 --> 00:26:21.339 That pattern again. Exactly. He finds himself 00:26:21.339 --> 00:26:25.230 adjacent to or directly. involved in situations 00:26:25.230 --> 00:26:27.890 where value is being faked and money is being 00:26:27.890 --> 00:26:30.970 extracted from a large faceless entity. First, 00:26:31.049 --> 00:26:33.109 it was investors. Then it was the Australian 00:26:33.109 --> 00:26:35.309 government. It's like he has a magnet for it. 00:26:35.569 --> 00:26:38.529 Or maybe he is the magnet. It suggests that even 00:26:38.529 --> 00:26:41.430 in his legitimate phase, he attracts operators 00:26:41.430 --> 00:26:44.710 who cut corners. Precisely. Birds of a feather. 00:26:45.470 --> 00:26:48.809 Let's shift gears to his modern moves. Because 00:26:48.809 --> 00:26:51.700 a guy like Belfort. has to stay on the cutting 00:26:51.700 --> 00:26:54.500 edge of money. What is the cutting edge right 00:26:54.500 --> 00:26:58.859 now? Crypto, of course. Of course. And his journey 00:26:58.859 --> 00:27:01.640 with cryptocurrency is classic Belfort. A flip 00:27:01.640 --> 00:27:05.240 -flop. A total 180. Originally, back around 2017, 00:27:05.579 --> 00:27:08.279 he was a massive skeptic. He called Bitcoin freaking 00:27:08.279 --> 00:27:10.900 insanity and mass delusion. He was on TV telling 00:27:10.900 --> 00:27:13.099 people to get out before they lost everything. 00:27:13.319 --> 00:27:15.440 I remember that. He was warning people away from 00:27:15.440 --> 00:27:17.059 it. He sounded like the voice of reason for a 00:27:17.059 --> 00:27:20.500 minute. But then prices skyrocketed. The market 00:27:20.500 --> 00:27:23.799 cap hit trillions and suddenly the wolf changed 00:27:23.799 --> 00:27:27.079 his tune. Now he is an inventor in crypto startups. 00:27:27.259 --> 00:27:29.559 He has pivoted to being a crypto bull. Why the 00:27:29.559 --> 00:27:31.640 change? Did he suddenly understand the technology 00:27:31.640 --> 00:27:33.740 better? Cynically. I think he saw where the money 00:27:33.740 --> 00:27:37.559 was. Yeah. Belfort chases liquidity. When the 00:27:37.559 --> 00:27:39.829 money was in meat, he sold meat. When it was 00:27:39.829 --> 00:27:42.269 in penny stocks, he sold stocks. Now the money 00:27:42.269 --> 00:27:45.150 is in crypto, so he sells crypto wisdom. But 00:27:45.150 --> 00:27:48.250 the blockchain bit him back. It did. In 2021, 00:27:48.569 --> 00:27:52.029 a hacker stole $300 ,000 in digital tokens from 00:27:52.029 --> 00:27:54.970 his crypto wallet. There is a certain irony in 00:27:54.970 --> 00:27:57.009 the wolf getting robbed. There is. He was very 00:27:57.009 --> 00:27:59.589 vocal about it, very angry. But it shows that 00:27:59.589 --> 00:28:02.470 even the master can get played in this new Wild 00:28:02.470 --> 00:28:04.769 West. I also want to touch on the yacht incident. 00:28:04.970 --> 00:28:07.309 Yeah. Because the sinking of the Nadine is such 00:28:07.309 --> 00:28:11.630 a perfect metaphor for his hubris. The source 00:28:11.630 --> 00:28:13.650 gives us some specific details on this that are 00:28:13.650 --> 00:28:17.849 just wild. Yes. The yacht, the Nadine. And you 00:28:17.849 --> 00:28:19.910 know who it was originally built for? No. Poco 00:28:19.910 --> 00:28:22.150 Chanel. Get out. I did not know that. That's 00:28:22.150 --> 00:28:24.190 a piece of genuine history. It was a beautiful 00:28:24.190 --> 00:28:29.039 historic vessel and Jordan Belfort sank it. Ego. 00:28:29.200 --> 00:28:32.259 Pure ego. He insisted on sailing into high winds 00:28:32.259 --> 00:28:34.539 off the coast of Sardinia. The captain, the expert, 00:28:34.660 --> 00:28:36.359 the guy who actually knows how to sail, advised 00:28:36.359 --> 00:28:38.640 him against it, said it was dangerous, said the 00:28:38.640 --> 00:28:41.640 wingers were too high. And Belfort. Belfort overruled 00:28:41.640 --> 00:28:44.859 him. He essentially said, I'm the wolf. I control 00:28:44.859 --> 00:28:47.220 the weather. Full steam ahead. And nature didn't 00:28:47.220 --> 00:28:50.180 care about his ego. The waves smashed the foredeck 00:28:50.180 --> 00:28:53.619 hatch. The yacht took on water and sank. It's 00:28:53.619 --> 00:28:55.599 at the bottom of the Mediterranean. And everyone 00:28:55.599 --> 00:28:58.079 on board. They all had to be rescued by Italian 00:28:58.079 --> 00:29:00.519 Navy Special Forces. It's the Stratton Oakmont 00:29:00.519 --> 00:29:03.480 story in miniature. Ignore the rules. Ignore 00:29:03.480 --> 00:29:06.180 the experts. Push full throttle until the whole 00:29:06.180 --> 00:29:08.480 thing goes under. And assume someone will come 00:29:08.480 --> 00:29:12.000 rescue you. Which, in both cases, they sort of 00:29:12.000 --> 00:29:15.220 did. He survived the yacht sinking and he survived 00:29:15.220 --> 00:29:17.660 the prison sentence. He always seems to have 00:29:17.660 --> 00:29:20.730 a life raft. Let's touch... Briefly on his politics 00:29:20.730 --> 00:29:23.269 before we wrap up, because for a guy who lives 00:29:23.269 --> 00:29:25.970 such a chaotic life, his political views are 00:29:25.970 --> 00:29:29.490 interesting. They are a mix. In the 90s, he donated 00:29:29.490 --> 00:29:32.869 to the Republican Party $100 ,000. OK, straightforward 00:29:32.869 --> 00:29:35.970 enough. But socially, he describes himself as 00:29:35.970 --> 00:29:38.049 a liberal at heart. He's pro -choice, things 00:29:38.049 --> 00:29:40.589 like that. He's not a staunch conservative on 00:29:40.589 --> 00:29:43.170 social issues. But he voted for Trump in 2016. 00:29:43.549 --> 00:29:46.650 He did. He said he agreed with the policies on 00:29:46.650 --> 00:29:49.410 government size and immigration. But he also 00:29:49.410 --> 00:29:51.869 later criticized Trump's rhetoric, calling it 00:29:51.869 --> 00:29:54.750 divisive. So he's not a blind loyalist, but he 00:29:54.750 --> 00:29:57.190 leans right on economics. And he had some strong 00:29:57.190 --> 00:29:59.970 words for the Democrats in 2020. Right. He criticized 00:29:59.970 --> 00:30:02.309 Bernie Sanders and Elizabeth Warren specifically. 00:30:02.789 --> 00:30:05.490 He said their financial policies would destroy 00:30:05.490 --> 00:30:08.289 the fabric of the country. Which, coming from 00:30:08.289 --> 00:30:11.289 a man who defrauded investors of $200 million. 00:30:11.730 --> 00:30:14.670 Is a bold statement on what destroys the fabric 00:30:14.670 --> 00:30:17.250 of a country. Exactly. Don't listen to Bernie. 00:30:17.609 --> 00:30:20.190 He'll ruin the economy. Now let me tell you about 00:30:20.190 --> 00:30:22.289 this penny stock that will make you rich. It 00:30:22.289 --> 00:30:24.609 highlights his worldview. He believes in the 00:30:24.609 --> 00:30:26.589 unchecked market. He believes that regulation 00:30:26.589 --> 00:30:29.130 is the enemy of opportunity, even though regulation 00:30:29.130 --> 00:30:31.450 is the only thing that eventually stop him from 00:30:31.450 --> 00:30:34.390 robbing more people. He views himself as a capitalist 00:30:34.390 --> 00:30:37.369 hero, not a villain. So we've traced the arc. 00:30:37.569 --> 00:30:39.910 We've gone from the styrofoam coolers on Jones 00:30:39.910 --> 00:30:42.720 Beach to the boiler room. We've been in the cell 00:30:42.720 --> 00:30:45.339 with Tommy Chong. We've seen the lawsuits, the 00:30:45.339 --> 00:30:48.099 payouts, or lack thereof, and the reinvented 00:30:48.099 --> 00:30:51.180 guru on stage. It is a heck of a journey. So 00:30:51.180 --> 00:30:53.740 what does this all mean? Why are we so fascinated 00:30:53.740 --> 00:30:56.500 by him? Why did we just spend an hour dissecting 00:30:56.500 --> 00:30:59.059 his life? I think it's because Jordan Belfort 00:30:59.059 --> 00:31:01.539 represents a very specific American conflict. 00:31:02.119 --> 00:31:05.589 On one hand, we value the hustle. We love the 00:31:05.589 --> 00:31:08.349 story of the kid from Queens who makes 20 grand 00:31:08.349 --> 00:31:11.069 selling Italian ice. We admire the salesmanship, 00:31:11.230 --> 00:31:13.410 the ability to generate wealth from thin air. 00:31:13.569 --> 00:31:15.109 We want to believe that we could do it too. We 00:31:15.109 --> 00:31:17.069 want to believe in the magic trick. We want to 00:31:17.069 --> 00:31:19.309 believe there is a shortcut. But on the other 00:31:19.309 --> 00:31:22.369 hand, we despise the fraud. We hate the idea 00:31:22.369 --> 00:31:24.529 of the little guy getting ripped off. Belfort 00:31:24.529 --> 00:31:27.630 forces us to ask, where is the line? At what 00:31:27.630 --> 00:31:31.549 point does sales become scam? And are we complicit 00:31:31.549 --> 00:31:33.569 because we buy the ticket to the movie? Yeah. 00:31:33.920 --> 00:31:35.579 Are we cheering for the bad guy because he's 00:31:35.579 --> 00:31:38.180 charming? It's the magnetism of the villain and 00:31:38.180 --> 00:31:41.099 the reality of forgiveness. Society has, for 00:31:41.099 --> 00:31:43.079 the most part, forgiven him. He is a celebrity. 00:31:43.079 --> 00:31:46.099 He is rich again. We have rewarded the reinvention. 00:31:46.420 --> 00:31:48.940 Which brings me to the final thought. The source 00:31:48.940 --> 00:31:51.599 mentions that Bill Ford's greatest regret is 00:31:51.599 --> 00:31:54.579 losing people's money. He says that in interviews. 00:31:54.839 --> 00:31:58.940 I regret it. He says the words. But actions speak 00:31:58.940 --> 00:32:02.009 louder. He fought the government. tooth and nail, 00:32:02.130 --> 00:32:04.849 to stop paying 50 % of his income to his victims. 00:32:05.369 --> 00:32:08.170 He found the legal loophole. He kept the movie 00:32:08.170 --> 00:32:11.250 money. So it raises the question, has the wolf 00:32:11.250 --> 00:32:13.890 actually changed his stripes? Or did he just 00:32:13.890 --> 00:32:15.950 find a legal way to hunt? I think the sheep should 00:32:15.950 --> 00:32:18.170 probably keep watching their backs. That's a 00:32:18.170 --> 00:32:20.269 wrap for this deep dive. Thanks for listening, 00:32:20.349 --> 00:32:22.150 and we'll catch you on the next one. Bye.