Wisdom from the Wolf of Wall Street

This 2013 movie is arguably one of the best movies about business and Wall Street success in recent times. Well,  there’s Social Network and the Pursuit of “Happyness” to contend with. But seriously, The Wolf of Wall Street does pack a punch even as we watched it recently again on a rented copy. Of course, Leonardo Caprio is definitely at his best here but then again, the story itself can be described as wild, witty and full of wisdom indeed. And it’s based on the true-to-life rags-to-riches story of Jordan Belfort.

Leonardo Di Caprio as Jordan Belfort

So who was Jordan Belfort again?

Jordan Belfort was the founder of Stratton Oakmont, best known for its boiler room operations which marketed worthless stocks and defrauded countless investors. Eventually,  the National Association of Securities Dealers (NASD) and now the Financial Industry Regulation Authority caught up on its anomalous transactions and eventually shut it down whilst filing money laundering and securities fraud against Jordan and his cohorts.

Those were the more recent days at Stratton Oakmont. However, it can be fancily recalled that this firm used to be the biggest over-the-counter firm for trading stocks in the US during the 1980s up until the 1990s.  In fact, it led the IPO of Steve Madden, the popular shoe manufacturing company, among around 30 others.

Interestingly they were able to do this for around 7 years accumulating revenues of up to US$3 billion (source: Wikipedia) at that time and employing around 1000 stockbrokers. Equally interesting is the founder who was just an ordinary young aspiring individual before he became the high-flying limo-riding hotshot that he was.

Jordan has a degree in Biology and was originally planning to be a dentist.  He set up a meat and seafood business earlier in his life but it eventually failed as well. His unprecedented detour to becoming one of the most iconic fraudsters in the history of the United States is truly worth knowing for learning’s sake.

What can we learn from this movie?

Personally, I learned to value integrity over luxury. It’s also important to take a good, long-term view of your actions – business-related or otherwise – and its consequences. And finally, I learned how important it is to exercise due diligence and do our homework especially when making business decisions; facts and not emotions shall be our guide.

From the standpoint of the regulators, it can be learned that a scam like this can happen right under their noses. Thus, they need to be more proactive and increase their oversight and regulation on these so-called trading companies. They, too, have to clean their ranks because, most of the time, the enemy is closer than they think. Additionally, their relationship with the investor community should also be cultivated and strengthened to increase reporting and compliance checks.

Developing countries like Vietnam, Philippines and Brazil should especially guard against money laundering, financial scams and deceptive marketing. Up and coming facilities should be controlled, monitored and regularly audited especially as these investment activities are not yet mainstream for these specific nations. Perpetrators of embezzlement and defrauding activities should be penalized swiftly and harshly when proven. And finally, robust processes and policies should be put in places such as increasing awareness of anti-fraud tools and practices.

Advent of EMVs and Merchant Services

The use of EMVs, merchant processing systems, strong user encryption and proper awareness can lead to a safer business and investment environment. If we are to minimize our risks, we need to be up-to-date with technologies that address the loopholes in our business and workplaces. We should also be vigilant in reporting personal incidences of defrauding. That said, we hope to see the last of Bernard Madoff (who caused between $18 billion to 50 billion investment losses from his Ponzi scheme), Jordan Belfort and their likes.

Incidentally, Jordan turned a new leaf now. He has been actively teaching and mentoring sales and business people on motivation, ethics, sales skills, and entrepreneurship.  He often says that the greatest regret he has in life is losing people’s money.

Well, yeah right! Hey, at least, it made one heck of a good movie. Popcorn, anyone?