The cocktail buzz was loud and Cristal clear: The Wolf of Wall Street had an image problem with the young entrepreneurs of Los Angeles.
“Frankly, I came here thinking this Jordan Belfort guy would be an asshole,” confided Robb Lejuwaan, a financial-services guy at a book signing for Belfort organized by 26-year-old Stephanie Frasco through the social-networking site E.Factor.
Even the Wolf’s hot blond girlfriend admitted she’d had serious questions about the cocky guy who walked up to her six months ago on a Manhattan Beach soccer field, told her he had broken up with his girlfriend and handed her his best-seller — about his career scamming Wall Street out of $200 million — like it was a business card.
“I was prepared to despise him,” Anne Koppe said. “I was ready to be bored by his story.”
And that was before she read the Mr. Big Shot subhead on the book’s cover: “Stock Market Multimillionaire at 26, Federal Convict at 36, I partied like a rock star, lived like a king, and barely survived my rise and fall as an American Entrepreneurial Icon.” Of course, the book inspired a Hollywood cliché of a bidding war that got crazy: Marty and Leo battled Brad and won. The film, with Leo set to play Belfort, is in development.
Clearly, the Wolf did not seem particularly ashamed of his off–Wall Street career fleecing greedy investors, or of his nearly two years in federal prison.
“Nobody got killed,” he said as he prepared to address the crowd. “I mean, I feel bad for the rich people that lost money, but …”
Belfort was more aware than anyone west of “Fifty-Billion Bernie” Madoff that there is a rising tide of public anger washing over Wall Street. Most of that anger is falling on the bankers and brokers who cooked up exotic financial instruments like Ninja mortgages (no income, no job, no assets) and credit-default swaps (I’ll cover your bad paper if you cover mine) until finally the whole toxic stew imploded three months ago into what’s starting to look a lot like The Great Depression 2.0.
“People are angry and scared,” Belfort said in his nasal New Yawk accent. “They’re really pissed off.”
Short and trim in a crisp brown-slacks-white-shirt-and-blue-blazer way, the fiercely analytical, fast-talking Belfort is still boyish at 46 with a full head of brown hair and smooth, angular features that suggest a prep school principal more than a perp-walk felon.
Until he opens his mouth.
Then you can imagine this guy talking you into anything — a 30-year ARM mortgage, some AK-47s from Russia or a partridge in a pear tree. Belfort had nothing to do with this year’s bubble-bursting, Dow Jones–diving, 401(k)-collapsing nightmare. He is one of the designated villains from the last great Wall Street crime spree of the mid-’90s, a real-life Gordon Gekko who pumped-and-dumped microcap stocks and spent the illicit profits on so much lurid sex and hard drugs that he says he lost his mind.
At his peak he was making a million dollars a week, kept $3 million cash in a drawer, couldn’t keep track of all the hookers coming and going from his Hamptons estate, and was taking a pharmacopoeia of illicit drugs that would stagger an elephant. Finally he was arrested getting on a plane to smuggle tons of cash to Switzerland and subsequently spent 22 months in Taft Federal Prison Camp. After his release, on November 1, 2005, Belfort got divorced from his second wife and she immediately moved cross-country to SoCal. So he followed her and moved to Manhattan Beach to be close to their two kids, whom he sees every day.
In his little house by the sea he stared out at the ocean, sober now and without his family. He relived in excruciating slow-motion detail the out-of-control roller-coaster ride he — and everyone around him — had been on for a decade.
Even his father, a respected accountant, had been sucked in when he came to work for Belfort at his Long Island brokerage known as Stratton Oakmont, a Waspy old-school name even though it was really two Jewish guys out to hype penny stocks and get out before they crashed.
So Belfort sat down and plumbed the depths of his soul to write The Wolf of Wall Street, a nickname given to him at a drunken party as he and his stock-selling crew watched Thurston Howell III on TV’s Gilligan’s Island proclaim himself the WWS.
His searing memoir of sex, drugs and stock-we-stole is really the story of one man’s self-destructive descent into money madness and an emotional hellhole. But some marketing genius decided it should be sold as a how-to business book and it languished on store shelves when it came out a year ago.
Then it got discovered by young entrepreneurs. “That’s when it became a Wall Street Journal best-seller,” said Frasco, who thought Belfort’s story would appeal to the independent-minded crowd at the mid-Wilshire shared office/networking site BlankSpaces. “It’s really a cautionary tale for young entrepreneurs, not a book about how to make money. That’s in there, but only little kernels here and there.”
AFTER THE COCKTAILS and canapés had been cleared away, everyone stopped their compulsive networking, holstered their CrackBerrys and took their seats. They were listening to a guy who had been living their mindset — young, hungry to make money and damn the torpedoes — just 20 years ago. So Belfort addressed the doubts head-on.
“Please don’t throw any shoes at me,” he said as he introduced himself.
He spoke with the genuine passion of a recovered alcoholic, and insisted he is not a walking example of the cynical maxim “crime pays,” which he says he hears all too often. “The truth is I’d be much further along in my life without crime,” he said. “I’d probably be a billionaire by now if it weren’t for my crimes.”
He pointed out that his successful relaunch on the other side of the penal system is not the norm. “I’m the exception,” he said. “Most white-collar criminals never rebuild their lives if they go to prison. When they get out they’re broke, they’re older, and everyone leaves them.” He also noted for the record that he is paying 50 percent of all his income into a fund for the investors who lost money in his scams.
At first the questions focused on his crimes: “How long did it take the feds to figure out you were full of shit?” But over the first hour the talk evolved into an investment seminar. By the second hour the Wolf had morphed into the Wizard of Wall Street. Never offering anything more than minimal contrition no matter how challenging the question, he threw out strong opinions on the current financial meltdown like a Bad Santa handing out lumps of coal on Christmas Eve:
On the Securities and Exchange Commission: “They’re all a bunch of morons. They’re the low end of the lawyer gene pool, and on top of that they’re grossly underfunded and understaffed. The SEC should be rolled up into the U.S. Marshall’s Office.”
On Treasury Secretary Henry Paulson’s handling of the government’s $700 billion bailout of the biggest banks and insurance companies: “Paulson is just giving the money away to his friends.”
On the government’s strategy for handling the credit crisis: “They’re wrong to try to string it out like this. You have to let it hit bottom, and then you can rebuild … I’m not saying let it go to a depression, but after a decade of everybody buying houses and jet skis and sports cars they can’t afford, there’s got to be some pain spread around.”
On how Bernard Madoff could have swindled so many for so long: “Any smart person not consumed by greed could have seen that Bernie was a fraud a mile away. How can you have the exact same returns year after year, and never a down year? I mean, helllllllooooo? If you were in the Wall Street club — and Bernie was in the club because he practically started NASDAQ — you didn’t get the same kind of scrutiny that my little firm out on Long Island got. … When Bernie threw me out of NASDAQ he told the press we couldn’t have people like me investing in his market. Now he turns out to be the biggest crook of all. What I did is small potatoes compared to what he did.”
On why he became a criminal: “I always wanted to be the best at whatever I did. On Wall Street, that meant being the best criminal. And I was. I danced around the SEC for three years. This is how stupid they are: They used a conference room in my offices as the headquarters for their investigation, so I bugged it. For three years, I heard every word they said about me.”
On why he took so much cocaine and other drugs: “To mask the guilt and remorse over what I was doing. You know what you’re doing is wrong so you take the drugs.”
The audience hung on every word and Frasco was still relaying questions coming in over E.Factor’s live-streaming feed two hours into the talk.
“Greed has to be counterbalanced by ethics,” said the Wolf as he tried to wrap up his complex, sometimes contradictory message. “Go out and make a ton of money but do it right.”
As he left with his gorgeous girlfriend, her gorgeous friends and several Hollywood types, the crowd staggered around as if a spell had been broken. “America is very forgiving if we feel it’s authentic,” said Lejuwaan, the guy expecting only arrogance from Belfort. “This guy was authentic. You could really feel that he has learned his lesson. If you screw up once and work to make your life better, then you’re even more trustworthy. That’s why people listened so hard tonight. They trusted him.”
It was one more sale for the real Wolf of Wall Street.