Blame It On The Quaaludes: Jordan Belfort grossed millions as a drug-fueled pump-and-dump artist. He eventually served 22 months in prison and spent one month in rehab. He now owes $107 million in restitution. His story has been bought by a production company owned by director Martin Scorsese, and is to star Leonardo DiCaprio. Belfort says he has lost everything — his family and briefly his freedom — and has truly changed his ways. He blames the drugs, and wants to pay off his debt to those he cheated. Stratton Oakmont victims are none too pleased by the Hunter S. Thompson-like book or the movie deal.

The investment-banking firm of stratton oakmont occupied the first floor of a sprawling black-glass office building that rose up four stories from out of the muddy marrow of an old long island swamp pit.

In truth, it wasn't as bad as it sounded. Most of the old pit had been reclaimed back in the early 1980s, and it now sported a first-class office complex with an enormous parking lot and a three-level underground parking garage, where Stratton brokers would take mid-afternoon coffee breaks and get laid by a happy hit squad of prostitutes.

Today, as on every day, as we pulled up to the office building I found myself welling up with pride. The mirrored black glass gleamed brilliantly in the morning sunshine, reminding me of just how far I'd come in the last five years. It was hard to imagine that I'd actually started Stratton from out of the electrical closet of a used-car dealership. And now … this!

On the west side of the building there was a grand entranceway meant to dazzle all those who walked through it. But not a soul from Stratton ever did. It was too far out of the way, and time, after all, was money. Instead, everyone, including me, used a concrete ramp on the south side of the building, which led directly to the boardroom.

I climbed out of the back of the limousine, said my parting farewells to George (who nodded without speaking), and then made my way up that very concrete ramp. As I passed through the steel doors, I could already make out the faint echoes of the mighty roar, which sounded like the roar of a mob. It was music to my ears. I headed right for it, with a vengeance.

After a dozen steps, I turned the corner and there it was: the boardroom of Stratton Oakmont. It was a massive space, more than a football field long and nearly half as wide. It was an open space, with no partitions and a very low ceiling. Tightly packed rows of maple-colored desks were arranged classroom style, and an endless sea of crisp white dress shirts moved about furiously. The brokers had their suit jackets off, and they were shouting into black telephones, which created the roar. It was the sound of polite young men using logic and reason to convince business owners across America to invest their savings with Stratton Oakmont:

“Jesus Christ, Bill! Pick up your skirt, grab your balls, and make a goddamn decision!” screamed Bobby Koch, a chubby, 22-year-old Irishman with a high-school diploma, a raging coke habit, and an adjusted gross income of $1.2 million. He was berating some wealthy business owner named Bill who lived somewhere in America's heartland. Each desk had a gray-colored computer on it, and green-diode numbers and letters came flashing across, bringing real-time stock quotes to the Strattonites. But hardly a soul ever glanced at them. They were too busy sweating profusely and screaming into black telephones, which looked like giant eggplants growing out of their ears.

“I need a decision — Bill! — I need a decision right now!” snapped Bobby. “Steve Madden is the hottest new issue on Wall Street, and there's nothing to think about! By this afternoon it'll be a f***ing dinosaur!” Bobby was two weeks out of the Hazelden Clinic and had already begun to relapse. His eyes seemed to be popping right out of his beefy Irish skull. You could literally feel the cocaine crystals oozing from his sweat glands. It was 9:30 a.m.

A young Strattonite with slicked-back hair, a square jaw, and a neck the size of Rhode Island was in a crouch position, trying to explain to a client the pros and cons of including his wife in the decision-making process. “Tawk to ya wife? Waddaya, crazy a sumthin'?” He was only vaguely aware that his New York accent was so thick it sounded like sludge. “I mean, ya think your wife tawkstaya when she goes out and buys a new pair of shoes?”

Three rows back, a young Strattonite with curly brown hair and an active case of teenage acne was standing stiff as a ramrod with his black telephone wedged between his cheek and collarbone. His arms were extended like airplane wings, and he had giant sweat stains under his armpits. As he shouted into his telephone, Anthony Gilberto, the firm's custom tailor, fit him for a custommade suit. All day long Gilberto would go from desk to desk taking measurements of young Strattonites and make suits for them at $2,000 a pop. Just then the young Strattonite tilted his head all the way back and stretched his arms out as wide as they could possibly go, as if he were about to do a swan dive off a ten-meter board. Then he said, in a tone you use when you're at your wits' end: “Jesus, will you do yourself a favor, Mr. Kilgore, and pick up ten thousand shares? Please, you're killing me here … you're killing me. I mean, do I have to fly down to Texas to twist your arm, because if I have to I will!”

Such dedication! I thought. The pimply-faced kid was pitching stock even while he was clothes shopping! My office was on the other side of the boardroom, and as I made my way through the writhing sea of humanity I felt like Moses in cowboy boots.

Brokers parted this way and that as they cleared a path for me. Each broker I passed offered me a wink or a smile as a way of showing their appreciation for this little slice of heaven on earth I'd created. Yes, these were my people. They came to me for hope, love, advice, and direction, and I was ten times crazier than all of them. Yet one thing we all shared equally was an undying love for the mighty roar. In fact, we couldn't get enough of it:

“Pick up the f***ing phone, please!” screamed a little blond sales assistant.

“You pick up the f***ing phone! It's your f***ing job.”

“I'm only asking for one shot!”

“ — twenty thousand at eight and a half — ”

“ — pick up a hundred thousand shares — ”

“The stock's going through the roof!”

“For Chrissake, Steve Madden's the hottest deal on Wall Street!”

“F**k Merrill Lynch! We eat those cockroaches for breakfast.”

“Your local broker? F**k your local broker! He's busy reading yesterday's Wall Street Journal!”

“ — I got twenty thousand B warrants at four — ”

“F**k that, they're a piece of s**t!”

“Yeah, well, f**k you too, and the piece-a-s**t Volkswagen you drove here!”

F**k this and f**k that! S**t here and s**t there! It was the language of Wall Street. It was the essence of the mighty roar, and it cut through everything. It intoxicated you. It seduced you! It f***ing liberated you! It helped you achieve goals you never dreamed yourself capable of! And it swept everyone away, especially me.

Out of the thousand souls in the boardroom there was scarcely a warm body over thirty; most were in their early twenties. It was a handsome crowd, exploding with vanity, and the sexual tension was so thick you could literally smell it. The dress code for men — boys! — was a custom-made suit, white dress shirt, silk necktie, and solid gold wristwatch. For the women, who were outnumbered ten to one, it was go-to-hell skirts, plunging necklines, push-up bras, and spike heels, the higher the better. It was the very sort of attire strictly forbidden in Stratton's human-resources manual yet heavily encouraged by management (yours truly).

Things had gotten so out of hand that young Strattonites were rutting away under desks, in bathroom stalls, in coat closets, in the underground parking garage, and, of course, the building's glass elevator. Eventually, to maintain some semblance of order, we passed out a memorandum declaring the building a F**k Free Zone between the hours of eight a.m. and seven p.m.

PRETTY YOUNG THINGS

It was all good, though, and it all made perfect sense. Everyone was young and beautiful, and they were seizing the moment. Seize the moment — it was this very corporate mantra that burned like fire in the heart and soul of every young Strattonite and vibrated in the overactive pleasure centers of all thousand of their barely postadolescent brains.

And who could argue with such success? The amount of money being made was staggering. A rookie stockbroker was expected to make $250,000 his first year. Anything less and he was suspect. By year two you were making $500,000 or you were considered weak and worthless. And by year three you'd better be making a million or more or you were a complete f***ing laughingstock. And those were only the minimums; big producers made triple that.

And from there the wealth trickled down. Sales assistants, who were really glorified secretaries, were making over $100,000 a year. Even the girl at the front switchboard made $80,000 a year, just for answering the phones. It was nothing short of a good oldfashioned gold rush, and Lake Success had become a boomtown. Young Strattonites, the children that they were, began calling the place Broker Disneyland, and each one of them knew that if they were ever thrown out of the amusement park they would never make this much money again. And such was the great fear that lived at the base of the skull of every young Strattonite — that one day you would lose your job. Then what would they do? After all, when you were a Strattonite you were expected to live the Life — driving the fanciest car, eating at the hottest restaurants, giving the biggest tips, wearing the finest clothes, and residing in a mansion in Long Island's fabulous Gold Coast. And even if you were just getting started and you didn't have a dime to your name, then you would borrow money from any bank insane enough to lend it to you — regardless of the interest rate — and start living the Life, whether you were ready for it or not.


It was so out of control that kids still sporting teenage acne and only recently acquainted with a razor blade were going out and buying mansions. Some of them were so young they never even moved in; they still felt more comfortable sleeping at home, with their parents. In the summers they rented lavish homes in the Hamptons, with heated swimming pools and spectacular views of the Atlantic Ocean. On weekends they threw wild parties that were so decadent they were invariably broken up by the police. Live bands played; DJs spun records; young Stratton girls danced topless; strippers and hookers were considered honored guests; and, inevitably, at some point along the way, young Strattonites would get naked and start rutting away right under the clear blue sky, like barnyard animals, happy to put on a show for an everexpanding live audience.

But what was wrong with that? They were drunk on youth, fueled by greed, and higher than kites. And day by day the gravy train grew longer, as more and more people made fortunes providing the crucial elements young Strattonites needed to live the Life.

There were the real estate brokers who sold them the mansions; the mortgage brokers who secured the financing; the interior decorators who stuffed the mansions with overpriced furniture; the landscapers who tended to the grounds (any Strattonite caught mowing his own lawn would be stoned to death); the exotic car dealers who sold the Porsches and Mercedes and Ferraris and Lamborghinis (if you drove anything less you were considered a total f**ing embarrassment); there were the maître d's who reserved tables at the hottest restaurants; there were the ticket scalpers who got front-row seats to sold-out sporting events and rock concerts and Broadway shows; and there were the jewelers and watchmakers and clothiers and shoemakers and florists and caterers and haircutters and pet groomers and masseuses and chiropractors and car detailers and all the other niche-service providers (especially the hookers and the drug dealers) who showed up at the boardroom and delivered their services right to the feet of young Strattonites so they wouldn't have to take even one second out of their busy day or, for that matter, engage in any extracurricular activity that didn't directly enhance their ability to commit one single act: dial the telephone. That was it. You smiled and dialed from the second you came in to the office until the second you left. And if you weren't motivated enough to do it or you couldn't take the constant rejection of secretaries from all fifty states slamming the phone down in your ear three hundred times a day, then there were ten people right behind you who were more than willing to do the job. And then you were out — permanently.

And what secret formula had Stratton discovered that allowed all these obscenely young kids to make such obscene amounts of money? For the most part, it was based on two simple truths: first, that a majority of the richest one percent of Americans are closet degenerate gamblers, who can't withstand the temptation to keep rolling the dice again and again, even if they know the dice are loaded against them; and, second, that contrary to previous assumptions, young men and women who possess the collective social graces of a herd of sex-crazed water buffalo and have an intelligence quotient in the range of Forrest Gump on three hits of acid, can be taught to sound like Wall Street wizards, as long as you write every last word down for them and then keep drilling it into their heads again and again — every day, twice a day — for a year straight.

And as word of this little secret began to spread throughout Long Island — that there was this wild office, in Lake Success, where all you had to do was show up, follow orders, swear your undying loyalty to the owner, and he would make you rich — young kids started showing up at the boardroom unannounced. At first they trickled in; then they poured in. It started with kids from the middleclass suburbs of Queens and Long Island and then quickly spread to all five boroughs of New York City. Before I knew it they were coming from all across America, begging me for jobs. Mere kids would travel halfway across the country to the boardroom of Stratton Oakmont and swear their undying loyalty to the Wolf of Wall Street. And the rest, as they say, is Wall Street history.

THE STEVE MADDEN IPO

Then someone said to me, “Well — Steve Madden's floating around here somewhere, and he seems kind of nervous. I don't think he's gonna do such a good job today.”

An immediate surge of adrenaline. Steve Madden! How ironic it was that with all the chaos and insanity this morning it had actually slipped my mind that Steve Madden Shoes was going public today. In fact, before the day was out I'd be ringing the register to the tune of twenty million bucks. Not too shabby! And Steve had to stand up in front of the boardroom and give a little speech, a so-called dog-and-pony show. Now, that would be interesting! I wasn't sure if Steve was the sort who could look into the wild eyes of all those crazy young Strattonites and not completely choke.

Still, dog-and-pony shows were a Wall Street tradition: Just before a new issue came to market, the CEO would stand before a friendly crowd of stockbrokers and give a canned speech, focusing on how glorious his company's future was. It was a friendly sort of encounter with a lot of mutual back-scratching and phony palmpressing.

And then there was Stratton, where things got pretty ugly sometimes. The problem was that the Strattonites weren't the least bit interested; they just wanted to sell the stock and make money. So if the guest speaker didn't captivate them from the moment he began speaking, the Strattonites would quickly grow bored. Then they would start booing and catcalling — and then spewing out profanities. Eventually, they would throw things at the speaker, starting with balled-up paper and then quickly moving to food products like rotten tomatoes, half-eaten chicken legs, and half-consumed apples.

I couldn't let such a terrible fate befall Steve Madden. First and foremost, he was a childhood friend of Danny Porush, my second-in-command. And, second, I personally owned more than half of Steve's company, so I was basically taking my own deal public. I had given Steve $500,000 in start-up capital about sixteen months ago, which made me the company's single largest shareholder, with an eighty-five percent stake. A few months later I sold off thirty-five percent of my stock for a little over $500,000, recouping my original investment. Now I owned fifty percent for free! Talk about your good deals!

In point of fact, it was this very process of buying stakes in private companies and then reselling a portion of my original investment (and recouping my money) that had turned Stratton into even more of a printing press than it already was. And, as I used the power of the boardroom to take my own companies public, my net worth soared and soared. On Wall Street this process was called “merchant banking,” but to me it was like hitting the lotto every four weeks.

Right now Steve needed me. But it had little to do with Stratton raising him $7 million and even less to do with the approximately $3 million. Going forward, my hold on Steve was based on my ability to control the price of his stock after it went public. As Steve Madden's dominant market maker, virtually all the buying and selling would occur within the four walls of Stratton's boardroom — which would afford me the opportunity to move the stock up and down as I saw fit. So if Steve didn't play ball, I could literally crush the price of his stock until it was trading in pennies.

It was this very ax, in fact, that hung over the heads of all Stratton Oakmont's investment-banking clients. And I used it to ensure that they stayed loyal to the Stratton cause, which was: to issue me new shares, below the prevailing market price, which I could then sell at an enormous profit, using the power of the boardroom.

Of course, I wasn't the one who'd thought up this clever game of financial extortion. In fact, this very process was occurring at the most prestigious firms on Wall Street — firms like Merrill Lynch and Morgan Stanley and Dean Witter and Salomon Brothers and dozens of others — none of whom had the slightest compunction about beating a billion-dollar company over the head if they chose not to play ball with them.

It was ironic, I thought, how America's finest and supposedly most legitimate financial institutions had rigged the treasury market (Salomon Brothers); bankrupted Orange County, California (Merrill Lynch); and ripped off grandmas and grandpas to the tune of $300 million (Prudential-Bache). Yet they were all still in business — still thriving, in fact, under the protection of a WASPy umbrella.

But at Stratton Oakmont, where our business was microcap investment banking — or, as the press liked to refer to it, penny stocks — we had no such protection. In reality, though, all the new issues were priced between four and ten dollars and weren't actually penny stocks. It was a distinction that was entirely lost on the regulators, much to their own chagrin. It was for this reason that the bozos at the SEC — especially the two who were now camped out in my conference room — were unable to make heads or tails out of a $22 million lawsuit they'd filed against me. In essence, the SEC had engineered their lawsuit as if Stratton were a penny-stock firm, but the simple fact was that Stratton Oakmont bore no resemblance to such.

Penny-stock firms were notoriously decentralized, having dozens of small offices spread throughout the country. Yet, Stratton had only one office, which made it easier to control the negativity that would spread throughout a sales force after the SEC filed a lawsuit. Usually that alone was enough to force a penny-stock firm out of business. And penny-stock firms would target unsophisticated investors, who had little or no net worth, and convince them to speculate with a couple of thousand dollars, at most. Stratton, on the other hand, targeted the wealthiest investors in America, convincing them to speculate with millions. In consequence, the SEC couldn't make their usual claim that Stratton's clients weren't suitable to risk their money in speculative stocks.

But none of this had occurred to the SEC before they filed their lawsuit. Instead, they mistakenly assumed that the bad press would be enough to drive Stratton out of business. But with only one office to manage, it had been easy to keep the troops motivated, and not a soul left. And it was only after the SEC had already filed their lawsuit that they finally got around to reviewing Stratton's new-account forms and it dawned on them that all Stratton's clients were millionaires.

What I had done was uncover a murky middle ground — namely, the organized selling of five-dollar stocks to the wealthiest one percent of Americans, as opposed to selling penny stocks (priced under a dollar) to the other ninety-nine percent, who had little or no net worth. There was a firm on Wall Street, DH Blair, that had danced around the idea for more than twenty years but had never actually hit the nail on the head. In spite of that, the firm's owner, J. Morton Davis, a savage Jew, had still made a bloody fortune in the process and was a Wall Street legend.

But I had hit the nail on the head, and by sheer luck I'd hit it at exactly the right moment. The stock market was just beginning to recover from the Great October Crash, and chaos capitalism still reigned supreme. The NASDAQ was coming of age and was no longer considered the redheaded stepchild of the New York Stock Exchange. Lightning-fast computers were appearing on every desk — sending ones and zeroes whizzing from coast to coast — eliminating the need to be physically located on Wall Street. It was a time of change, a time of upheaval. And as volume on the NASDAQ soared, I, coincidentally, was embarking on an intensive threehour-a-day training program with my young Strattonites. From out of the smoldering ashes of the Great Crash, the investment bankingfirm of Stratton Oakmont was born. And before any regulator knew what hit, it had ripped through America with the force of an atomic bomb.


From The Wolf Of Wall Street by Jordan Belfort. Copyright by Jordan Belfort. Reprinted with permission of The Bantam Dell Publishing Group, a division of Random House.


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