Jordan Belfort, who cheated investors out of as much as $200 million as chairman of the defunct brokerage firm Stratton Oakmont Inc, one of the famous boiler rooms that pumped up stocks in the 1990s, tells Piers Morgan he feels terrible about what happened but will not live his life in shame.
The real-life Belfort, before drug rehab and a 22-month stretch in a federal prison camp, has inspired Academy Award-winning director Martin Scorsese's film The Wolf of Wall Street based on his book by the same title.
In 2003, a US District Judge in Brooklyn ordered Belfort to pay $110.4 million in restitution to investors as part of his punishment. Belfort and Daniel Porush, the former president at Stratton Oakmont, also forfeited about $11 million in properties, court records show.
Half of Belfort's monthly income goes toward restitution and US District Judge John Gleeson has ordered Belfort to file an affidavit with the court detailing the financial arrangements surrounding the book and a movie deal.
In his twenties, Belfort made millions of dollars a year taking companies public. He said he could have made even more if he had run the Long Island brokerage legitimately. Instead, he paid his rowdy salesmen handsomely to pump up the prices of small stocks with fraudulent pitches.
In the initial public offering of shoe company Steven Madden Ltd., Belfort pocketed some $20 million. A big chunk of the shares of the offering went into what Belfort describes as ratholes, or accounts held by his cronies at $5 or $6 a share.
Then he used the power of his boiler room operation at Stratton Oakmont to drive up the price of Madden's stock to around $20 a share. Belfort then pounced, selling the stock stashed in the ratholes to produce most of his profit.
Belfort thought he was too clever to get caught by what he describes as bumbling investigators with the U.S. Securities and Exchange Commission. Besides, his mentors were cunning teachers. One lawyer kept pens for a dozen or so years to backdate documents so they would later pass a gas chromatography test administered by the FBI.
But when you take as many drugs as Belfort says he did, you do a lot of stupid things. For one, he was obsessed with smuggling money into Switzerland so he could skirt US securities laws and expand his illegal empire. (Reporting by Reuters)
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