He’s one in a long line of Wall Street bad boys. Jordan Belfort, the self-described “Wolf of Wall Street,” has attracted detractors and devotees alike.
Having survived the collapse of his company and his marriage, a 22-month prison term – and still haggling over $110 million owed to defrauded investors – Belfort has reinvented himself as a motivational speaker. He travels the globe, preaching the need for business ethics and decrying his former behavior as head of Stratton Oakmont, a now-defunct penny stock brokerage known as much for its sex-and-drug-fueled office antics as its “pump and dump” scams that duped investors by artificially inflating stock prices. While he and his partners raked in – and lavishly spent – millions, investigators say small-time investors were cheated out of as much as $200 million.
Indicted in 1998, the Bronx native now lives in Hermosa Beach, where he runs Global Motivation Inc. He spends about three weeks a month on the road, giving speeches to audiences at colleges, business conventions and private companies. About to start a U.S. speaking tour in California and Florida, he gave a fast-clipped, 20-minute interview to The Sacramento Bee this week, shortly before catching a flight to Las Vegas for a sales talk to automobile dealers. Here’s an excerpt:
Wall Street has been vilified for decades – in film, media and in courtrooms – as synonymous with greed. Is it better/worse today than when you were running Stratton Oakmont?
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I think much worse. The years after I left, it got worse. But just because other people are doing it, doesn’t make what I did right. Back when I was (running Stratton), it was the total Wild West on Wall Street. That was my rationalization: Everyone’s doing it. Bull. ... Just because everyone else is doing something wrong, doesn’t give you (permission). That was a huge error on my part.
It was going on and got much worse leading up to the GFC (global financial crisis). The whole industry was running amok.
You’ve remade your career as a motivational speaker. What’s different in your message on this new tour?
The big difference is that I’m giving all the profits away (to Stratton Oakmont’s financial victims). ... One of my messages is that success without ethics and integrity is not success. For me, a lack of ethics cost me everything. You don’t cut corners to get rich. It takes a little longer when you’re playing by the book, but you’re building a foundation on concrete, not sand.
What’s your biggest regret in the collapse of your personal life and your company?
My biggest regret is that people lost money when the company collapsed. Any of the behaviors that led me to allowing the firm to fail, I would change those. I wouldn’t choose to live that again. My personal life, my insanity, the drugs … that was my life. It was part of my journey. My personal recklessness, I wouldn’t change, just because (living with regrets) is not a healthy way to look at life. My drug addiction affected me, my family … but I wouldn’t change it. But I would not advise someone to live like that because it was horrible.
It was a huge wake-up call to lose everything. That sort of cataclysmic event makes you realign your values … This lifestyle is so much better than my old value system.
Where did Stratton Oakmont go astray?
The company was absolutely 100 percent on the up-and-up (when it started). … It wasn’t a Bernie Madoff thing, where I started out (to deceive investors). It took about a year for it to spiral out of control. I chose the wrong mentor, I crossed the ethical line. You start doing a little rationalization and before you know it, you get desensitized.
There’s still greed on Wall Street. … There’s a very fine line between greed and ambition. You can make money, but not at the expense of other people.
There have been media reports criticizing your California lifestyle and statements by the Brooklyn DA’s office that you’re not doing enough to pay back the $110 million owed to more than 1,500 victims of Stratton Oakmont.
It’s ridiculous. I’ve paid more than anybody in my position has. The government’s view is completely incorrect, based on a flawed assumption, on their part, that I owe 50 percent of my income for life. That is completely untrue. In fact, two months ago, the judge ruled 100 percent in my favor, saying that I am not obligated to pay 50 percent of my income for life. .... I currently pay $10,000 a month, which was a number my lawyer worked out with the government, and on top of that I am voluntarily turning over all of my book and movie royalties, and also all my profits from the U.S. tour.
When it comes to investing, especially in the world of penny stocks, how would you advise people to avoid people like you?
Good question. Honestly, I’m really reticent to advise people to invest in any stock, unless you know the person recommending it to you really well. In addition, you can Google anything nowadays, so you should do your own research, too. Don’t just rely on someone else telling you what to invest in.