Analysis Of Jordan Belfort's ' Pump, Chernobyl, And The United States Of America

1878 WordsMay 6, 20158 Pages
This case is between Jordan Belfort, a founder or Stratton Oakmont, and the United States of America. Before the case can be examined, it’s important to understand Jordan Belfort’s background. He’s better known as the infamous “Wolf of Wall Street” for his successful earnings of $50 million a year, from having one of the most successful sales organizations in “Wall Street History.”(Belfort, 2010) Belfort established an investment firm, Stratton Oakmont, that became highly profitable due to it’s “pump and dump scheme.” His brokers would first push stocks on investors from reputable companies before then urging them to purchase stocks in Stratton’s IPO’s or penny stocks in at least thirty four companies. Penny stocks gave them a fifty percent commission and were pretty much worthless to the buyer.The more investors, the greater the inflation of stock, until Stratton would then sell it’s own holdings in the stock creating a profit. (A&E, 2015). Belfort’s “pump and dump” scene was quite clever. He used “flippers” which were friends of the company who bought all the stock and sold it back to begin his plan. Then through getting clients to promise, using the stock market as camouflage, having friends begin buying the stock to avoid suspicion(rather than buy between accounts), and using limits, he furthered his plan. Finally he would sell the stock high and “close the doors.” He would let the stock remain high for a month and make the brokers encourage the investors not to sell

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