The Wolf of Wall Street - Part 1

So, I leapt at the chance to interview Mr. Belfort. I jumped right into the book as soon as I got it - and had time free. Insanity. Pure insanity. Shaving female sales assistants' heads, tossing midgets, Ethiopian hookers, and blacking out after trying to molest a Swiss stewardess while on a shitload of Quaaludes (and a bunch of other drugs) - the man lived.

Exclusive video of one of Stratton's Infamous Parties

After being convicted of securities fraud and money laundering and serving 22 months in jail - and producing the film Santa with Muscles, Belfort has released his tale, a look inside the madness...which is now going to be made into a film by two people you may have heard of - Martin Scorsese and Leonardo DiCaprio.

The book doesn't go into how you built Stratton up to what it eventually became. Why?
That's actually in the sequel that I am writing right now. I didn't structure it that way to create a sequel. It just happened in the editing process where the original manuscript was 1200 pages and in whittling it down, it was just decided that certain things couldn't be covered. We had to pick our spots. I refer to Stratton in flashbacks mostly, but you're right, that's one of the things that's missing.

Whenever there is some traumatic happening or event, there is always opportunity amid the ashes. Stratton was a product of the wild realignment after the Crash of 1987. Everyone was running around in 10 different directions, regulators were stressed to the point of fracture, no one knew what was going on.

Stratton defied conventional wisdom by playing against the idea that rich people will not buy low priced stocks from a cold call. I took the classy wrap I had been taught at a bigger firm and went to a small company in Long Island and eventually applied it to selling penny stocks.

I was really, really good on the phone. I had developed my own little system, my own style of selling that the low priced stock business had never heard of before. Eventually, the manager of this company tried to get me to open a firm with him. I wasn't really interested but I went to see a lawyer anyway to scope it out. The lawyer called me that night and said that he was very impressed with me and offered his legal work for free and access to a little brokerage franchise that I could be a part of called Stratton Securities.

I went to Stratton with four young stockbrokers, they were like my following. I ran the firm for 5 - 6 weeks, selling penny stocks to poor people, making about $80k a month. Then one night I was lying in bed and it hit me - I wonder what would happen if I tried to sell penny stocks to rich people?

So the next day I went to work, got a list of the richest people in America from Dun & Bradstreet, got my top broker, Danny Porush, and told him that we were going to call these leads up and try to sell them penny stocks. They didn't bite. I thought maybe the problem was they didn't want penny stocks, it just sounds cheap, maybe they just wanted $5 stocks.

Danny tried the same process with a $5 stock we had languishing called Ventura Entertainment. It didn't really work, some people were biting but not many. So I went home, laying in bed that night and that's when it hit me - people weren't taking us seriously.

So I implemented a 3 step system: First call, no selling. Then we send them a letter and a little book on how to make money in growth stocks, then they felt obligated to speak with you. 10 days later, we called back and sold them Eastman Kodak, which was safe.

Then 7 days later, after they sent the check in, we called them back and not sell them Kodak, tell them how things were going with the stock but then push Ventura Entertainment.

He comes back in after reading the script I wrote for selling Ventura and says "You're not going to believe this, this guy just bought $120,000 worth on the first trade". The biggest trade in history on a penny stock was like $3000. This guy dumps $120k and apologizes for not buying more.

At that very instant, I knew. As soon as that happened, I looked out into my little office with 12 brokers behind their wooden desks and I saw the future of Stratton in front of me. I said to myself, "I'm gonna make so much money...", I knew there was going to be hell to pay.

Before I knew it, I was making $1million dollars a week, kids from all across the country started lining up at my door, swearing their loyalty to The Wolf of Wall Street, I started buying up these little companies like Steve Madden shoes, financing them and then taking them public and my net worth soared and soared.

Eventually, things just got ridiculous. We all got addicted to drugs, these acts of depravity would go to extremes, sleeping with prostitutes...

Tossing midgets?
Yea, I mean, it began to be like Ancient Rome, they didn't start off feeding slaves to lions, first there was a fight were someone got hurt, then someone lost an arm, then someone got the idea to throw the slaves to the lions.

It was all about desensitization: first you start off shaving someone's head, a year later you hook someone up to a car battery. We'd whatever we could, so eventually we got around to tossing midgets.

Things could have turned out very differently, the first guy I met as a mentor was a crook, a Wall Street manipulator. 10% of Wall Street is crooked. If I hadn't been an instant gratification junkie, things would have turned out much differently.

Do you think that, at 24, had you not been going broke, that if you had had a steady job making decent money, that this would not have happened?
I don't think that was ever my path. I had lots of jump off points along the way. I was a really good student, could have gone to med school, went to dental school for a day but dropped out because I didn't like it.

I wanted to make money. My parents instilled in me that the only noble way to make money was to be a doctor and I think in a way that that backfired. Some of it was just good luck and bad luck.

Opportunities just presented themselves to me and I didn't have the emotional maturity to act on them in the right way. If I had done things a little bit differently, we could have made billions. We were on our way to being like Merrill Lynch. If I had delayed my gratification for just 1 year, forget about it, we would have been acquired by a major brokerage firm for billions.

You still don't remember anything as far as being on the plane to Switzerland and waking up strapped to your seat?
Naw, I don't remember. I'm spared the memory. That's pretty common for someone who's a drug addict, you black out all the time. I had a bunch of blackouts. I sort of remember stumbling down the aisles, then coming on to the stewardess and it seemed to be going well.

Then there was some sort of ruckus, I remember being forced into my seat but I thought it was because we were taking off. Everything was so vague. Then there was the car accident. I would swear to this day that I didn't have a car accident.

I hit like 7 cars and I came home remembering everything inch of the trip and swear I didn't have an accident but the car was totaled. That stuff happens.

How did you feel when Scorsese and DiCaprio were interested in turning the book into a film?
There was a bidding war between Brad Pitt and Scorsese/DiCaprio. To me, this whole thing has been surreal. A bunch of people told me they loved the book and my agent said that the book was going to be a big hit here and internationally, that it would be made into a movie. But I'd learned my lesson from younger years about hype, so I didn't pay it much mind.

The book was edited, I sat down with this producer who loved the book and she sent it out to a bunch of people. Well, no one wanted it. A couple rejections came in just because people didn't like the title. So then Terry Winter, a writer for the Sopranos, read the book and went nuts for it.

When he said he wanted to write the script, Alexandra, the producer, called back the top 10 people in the industry and said that Terry wanted to do the screenplay, so of course then they read the book. DiCaprio and Scorsese were the first to look at it, the Brad Pitt, then Mark Wahlberg, then Clooney. It all happened so fast, and eventually the bidding got caught between Pitt and Scorsese and DiCaprio.

I was playing soccer with my kids and I get a phone call, the price was going up and up.
I didn't write the book for money, I came out of jail and didn't know what to do with my life, so I decided to write about my life, but not for the money. Finally both sides started saying that whatever the other side said, they would pay 10% more. I could have let it go on all weekend and made twice as much money, but that wasn't what I wanted to do.

At the end of the day, DiCaprio and Scorsese, Scorsese just won the Academy Award, how could I not go with that. So I did. Then it hits the papers and all these foreign countries start buying the book and I started selling all across the world. The book is in like 14 different languages already.

It figures that keeping up with the regular insanity of my life that this sort of thing would happen to me.

Photos courtesy of Jordan Belfort and Jennifer Fader @ Rogers and Cowan