Belfort’s scams almost all involved hyping an IPO that Belfort and his associated companies and friends owned very large stakes in. Clients of Stratton Oakmont would then purchase shares at the IPO, radically inflate the price, and Belfort would sell out his shares and make a fortune. This is the classic pump and dump the SEC continues to try to snuff out today.

Say no to any salesperson that attempts to pressures you to make an immediate decision. Stratton Oakmont brokers were experts at exerting immediate pressure on investors to invest NOW because it was a IPO that had to be acted upon. If the broker doesn’t have the time to explain the investment to your regular investment professional, or other party, or if they ask “Can’t you make your own investment decisions?” Say No.

Don’t get pressured to make a decision before checking for past censures, pending investigations, or lawsuits and verified legitimate registration. Some Stratton Oakmont brokers had dozens of complaints on their records. For firms and advisers based in the United States, check the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) for more information. A simple Google check remains the best method for performing due diligence on brokers.

These claims, frequently used by Stratton Oakmont brokers, should all be uber red-flag phrases for the wise investor. Legitimate investment professionals do not promise sure bets. Scammers often make the combination of safety and high returns seem plausible by granting you “special access” based on your relationship with a mutual acquaintance or shared affiliation.

Con artists will not hesitate to exploit the good manners of the potential victim. Stratton Oakmont brokers loved cold calling Midwest investors because they were reluctant to report fraud or hang up the phone. A stranger who calls and asks for money is to be regarded with utmost caution and skepticism. It's not impolite to just hang up or to report fraud.

Too many investors trust unscrupulous investment professionals and outright con artists to make financial decisions for them. They then compound their error by failing to keep an eye on the progress of the investment. Insist on regular written reports. Check the written information. Look for excessive or unauthorized trading in your funds. Don’t be swayed by assurances that such practices are routine or in your best interest.

Most of the investors who sued Statton Oakmont and Jordan Belfort never collected a dime. The firm gathered up adverse judgments and arbitration awards and simply closed up shop stiffing dozens of investors. At least if an investor is dealing with Merrill Lynch or Morgan Stanley, if there is fraud, the investor will be able to collect if they successfully sue the brokerage firm.