What did Jordan Belfort do in The Wolf of Wall Street that was illegal?
In "The Wolf of Wall Street," Jordan Belfort's illegal activities primarily revolved around his role as the founder of Stratton Oakmont, a brokerage firm that engaged in several fraudulent practices. Here are some of the key illegal actions depicted:
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Securities Fraud and Money Laundering: Belfort and his firm were involved in "pump and dump" schemes, where they artificially inflated the prices of penny stocks by spreading false information and then sold them at the inflated prices, causing significant financial losses for investors135. They also laundered money through complex schemes involving offshore accounts and fictitious companies4.
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Stock Manipulation: Stratton Oakmont manipulated stock prices by controlling large stakes in companies, such as Steve Madden Shoes, and using aggressive sales tactics to drive prices up before selling their shares4.
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Boiler Room Operations: The firm operated as a boiler room, employing high-pressure sales tactics to convince clients to invest in highly speculative securities35.
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Regulatory Evasion: Belfort and his associates used various methods to evade regulatory scrutiny, including creating fake companies and using loopholes like Regulation S to invest in the U.S. stock market4.
These activities led to Belfort's indictment for securities fraud and money laundering in 1999. He eventually pleaded guilty and served 22 months of a four-year prison sentence35.