The Wolf of Wall Street: Manhattan Beach author’s rise and fall will be portrayed by Leonardo DiCaprio

When the topic turned from hard core finance to hard court tennis the Wolf of Wall Street suddenly sounded like John McEnroe after winning Wimbledon.

“I’ve got the best forehand in Manhattan Beach,” Jordan Belfort proclaimed. “Definitely not the best backhand… but the best forehand? Yeah.”

Manhattan Beach is home to Maria Sharapova and Jeff Tarrango, the fiery former pro who once cracked the top 50 in the world. And there are plenty of baseline bashers at Live Oak Park and stylish strokers at the Manhattan Beach Country Club.

But none of that local talent fazed Belfort, who has lived in the Manhattan Beach area since he got out of Taft Federal Prison Camp in central California in November 2005.

“I‘ve got the best forehand in Manhattan Beach,” he repeated.

Marty and LeoD and…Jordan from Queens?

Whether it’s evaluating his own tennis game, analyzing the current financial meltdown — “Everybody spent money they didn’t have” — or explaining how “Fifty-Billion Bernie” Madoff got away with running a Ponzi scheme for so long — “Greed and wishful thinking prevailed over common sense” — Belfort always has plenty of quick, straight-to-the-point answers.

Though 46, his short stature contributes to his still-boyish persona. His trim, compact frame and smooth, angular features suggest a prep school professor more than a perp walk felon. He has a fiercely analytical intelligence that animates the outspoken and outsized narrative voice that made his autobiographical book a commercial and critical success.

Although many readers and critics found his fast-forward, rub-your-nose-in-my-squalor approach compelling and captivating, not all the book reviews were laudatory. Some bashed his writing for too much self-indulgent boasting about his compulsive sex life, his simultaneous Quaalude-and-cocaine addictions and his out-of-control spending and conspicuous consumption. And they noted the book has precious little contrition, regret or compassion for the victims of his investment scams, who lost a total of about $110 million.

Other critics complained that there weren’t enough details about his stock schemes and that he left out the end-game back-stabbing and betrayals that led to his arrest and conviction. Instead, he spent most of the last part of the book detailing his crazy antics in drug rehab. He now says he has been drug free since April 16, 1997, confessing only to a little alcohol use now and then.

But Belfort says his legions of online critics are missing the larger point of the book, which was written over eight months in a cathartic rush and handed to the publisher at twice its published length, which is still 522 pages in the hardcover edition.

As a first-time writer with no training and no sense of style or technique, he said, the only way he could tell his story was to write it as if it was happening to him all over again. His idea was to recall the events, the dialogue and the emotions in the present tense, without an outside narrator or any kind of a Greek Chorus — like a sympathetic friend or a disinterested bystander — to guide the reader through the moral muck.

“I’m afraid that some of the reviewers were reviewing me and my behavior back then, rather than the book itself,” Belfort said. “That’s too bad, because in no way am I proud of what I did. I wrote this as a cautionary tale, not to brag about all the women I had or the money I made and spent on all the craziness.”

Released in September 2007 by Bantam Books, it got off to a slow start when some marketing genius decided it should be sold as a how-to business book instead of as the searing personal memoir of obsession, addiction and deception that it really is.

But it ultimately became a cult book among young entrepreneurs — many of them Wolf wannabes — and sold more than 100,000 copies around the world. The film rights were quickly snapped up by Warner Brothers, with Martin Scorsese slated to direct and Leo DeCaprio starring as the Wolf.

Sex, Drugs and Stock-we-Stole

“The Wolf of Wall Street” is an unrelenting, in-your-face tale of three obsessions: over-the-top sex, pharmaceutical-pure drugs and plenty of stock-we-stole. By mixing and matching the multiple obsessions in a cocktail of compulsive confession, it becomes a case study of a charismatic young man who hit the late ‘80s stock market just as it was taking off and headed for the money-on-the-moon.

Belfort emerges as an Alpha Dog of primitive persuasion, a born salesman who clawed his way out of the cold-calling jungles at Wall Street firm LF Rothschild — where you better come up with 10 potential investors a day or it’s time to hit the bricks, Buster — to create Stratton Oakmont, his soon-to-be-legendary Long Island investment firm.

The firm’s motto: “No one hangs up the phone until the customer buys or dies.”

He admits he ran Stratton Oakmont like a cult leader who controlled people through control of the purse strings, knew everybody’s private business and treated women like sexual vending machines.

He perfected a pump-and-dump stock scheme to enrich himself and hundreds of his equally out-of-control employees. He was making $1 million a week while making a mockery of the Security and Exchange Commission’s feeble enforcement efforts.

The pump-n-dump scheme was easy to pull off because people were constantly approaching him with businesses they wanted to take public. When he saw one with potential he typically would agree to hand over seed money of less than $1 million in exchange for an equity stake in the business, usually up to 85 percent. Then he would have his boiler room brokers create a market for the stock during its initial public offering by pushing sales over the phone. After pumping up the price Belfort, using dozens of proxies or so-called rat holes, would unload his large blocks of stock on clueless investors who wanted to get in on the action.

When he finally came onto the SEC’s radar and it filed suit against Stratton Oakmont, their investigators set up headquarters in a conference room at Belfort’s Stratton office. He had the room bugged and listened to every word the SEC was saying about him for the next two years. This is the same SEC, he points out, that swung and missed on finding Bernie Madoff’s $50 billion Ponzi scheme despite serious and credible warnings over the years.

“The SEC is a bunch of morons,” Belfort says now. “They’re the low end of the lawyer gene pool…the hotshots out of law school go to the private firms with the big bucks, and these SEC schmucks are just putting in time until they can go private too. So they soon leave, the new guy has to get up to speed, the cycle repeats itself and the investigation goes nowhere.”

He couldn’t help noting that Bernie Madoff was the chairman of NASDAQ when he was barred from trading.

“Bernie told the press we couldn’t have people like me investing in his market,” Belfort said. “Now he turns out to be the biggest crook of all. What I did is nothing compared to Bernie.”

Weekend at Belfort’s

For a private, reality-before-there-were-reality-shows glimpse at just how extravagant and out-of-control the Wolf’s life-style had become at its peak, go to Youtube.com and punch in the words Jordan Belfort. Skip the recent CNN interview and all the other book-related interviews he has done in the last year. Instead select the 5-minute home-video clip made on Memorial Day 1990.

With his long brown hair waving in the wind, a 28-year-old Belfort hides his ludes-and-coke high behind big sunglasses and loudly slurs his words into a microphone while looking down from the upper porch of his Westhampton mansion. He appears to be under the influence of at least four intoxicants — alcohol, drugs, lust and greed — as he exhorts the hundreds of brokers, hookers, cold-callers, secretaries and clerks gathered on the great lawn below him at the start of a wild, drink-drug-and-let’s-do-it party at the boss’s place.

As long as they keep working hard and making the cold calls and booking a record number of stock sales, The Wolf promises the yelling, cheering, boozing crowd — sounding much like the Ironman crowd at the end of Hermosa Beach’s annual July 4 paddle-run-chug-a-six-pack race –– then they can expect to double their incomes in the next year.

“Those making a hundred grand now will be making 200 grand a year from now,” he says.   “Those making 200 grand will be making 400, and those making a million …” The crowd goes crazy as he ends it with a plea to get the party started.

The audio and video together of an electric speaker and a charged up audience drunk on the power of money and possibility is eerily reminiscent of a vainglorious Benito Mussolini bragging to the crowds in the Via Piazza. But of course Mussolini was a notorious dictator responsible for the deaths of millions while the Wolf is only a common white-collar felon who spent 22 months in federal prison. As he frequently says of his crimes: “Hey, nobody got killed.”

Under ever-increasing pressure from the SEC, Stratton Oakmont declared bankruptcy in 1997. The following year Belfort was arrested on charges of conspiracy to commit securities fraud — the so-called pump-n-dump scheme. He was also charged with laundering millions of undeclared dollars through Swiss bank accounts. He agreed to work with the government and spent the next five years first gathering evidence — yes, he secretly wore a wire — and later testifying against many of those friends and associates he had conspired with.

Dental school dropout

Belfort’s casual claim to have the best forehand in Manhattan Beach was exactly the kind of bullet-proof self-confidence that enabled him to survive and prosper growing up in the meandering streets of Bayside, Queens as part of a 1970s middle-class family trying to find its place in the sun in a working-class neighborhood.

The Wolf’s first real entrepreneurial venture came in his 17th summer when he started selling Italian ice at Jones Beach. By the following summer he had dozens of his friends working for him and was making almost a thousand bucks a day — a very big deal back then.

“That’s when we knew he was going to be a big earner,” his father Max Belfort said. “He was making adult money and the other kids were coming to him asking for jobs, asking for favors. He was a teenage big shot.”

A few years later, in 1984, on his very first day of dental school a professor warned his class that the Golden Age of Dentistry was over and that those who were there because they thought it was a good way to get rich quick should quit right now.

Belfort stood up and walked out.

He took an entry level, cold-calling job on Wall Street, where he worked his way up, got his Series 7 broker’s license and in 1988 started Stratton Oakmont, his own investment banking house on Long Island.

His big innovation: instead of pitching his low-rent stocks to low-rent investors with a few thousand bucks to spend, he pitched them to corporate big shots and other people who had big-time money to invest.

It worked beyond all expectations and soon he was recruiting — or rather screening — all the young hotshots from Long Island who wanted to get in on the Wolf’s gold rush, to drive the fast foreign cars and bang the fast-track women like the guys at Stratton Oakmont were doing so publicly and so loudly.

“That’s why I went to Long Island,” Belfort said. “I knew there was a big pool of young, hungry kids that we could train to sell stocks the Stratton way.”

The Howard Stern of authors

Wolf wanted to set the record straight on some issues that are percolating right now on the internet, where his book’s success and his film deal have made him into a buzz-worthy figure. There are still plenty of victimized Stratton Oakmont investors out there.

For the record, The Wolf had nothing to do with the current bubble-bursting, 401K-collapsing, real estate-crashing financial meltdown. Nor did he have anything to do with all the Ninja mortgages (no income, no job, no assets) or the infamous credit default swaps (I’ll cover your bad paper if you cover mine) that fueled this meltdown.

Instead, he is one of the designated villains of the last great Wall Street crime spree of the late 1980s to mid-90s. It featured the more mundane pump-and-dump stock schemes: use your firm’s brokers to manipulate the market and inflate your product during the IPO phase before selling off quickly, picking up the big paper profits and letting someone else take the real-world loss when the stock falls.

Second, he lives in Manhattan Beach not to be near Hollywood but to be near his two children, who were taken by his wife when she divorced him. She moved to Southern California, so after prison he followed and ended up in Manhattan Beach because it seemed like a great place to write his book while staring out at the ocean.

Most important, he says, is that 95 percent of the stock and securities transactions he executed as president of Stratton Oakmont were legal. But he also admits that 60 percent of his profits came from the illegal five percent of securities fraud and money laundering activity.

And yes, he has turned his many crimes into a best-seller and a film deal. But under a court-mandated plan, half of his income goes into a fund for his victims. And this beautiful Manhattan Beach house that he lives in? He’s renting it at below-market value from a sympathetic landlord.

It is important for people to know, he says, that after being arrested in 1998 he cooperated with the government for five years, testified at several trials and then served 22 months in federal prison on a four-year sentence as part of a plea bargain on charges of conspiracy to commit securities fraud and launder money. And he said he has paid back more than $13 million into a fund that provides restitution to his victims.

FBI Agent Gregory Coleman, who pursued Belfort for seven years, confirmed that amount. “Mr. Belfort has made significant restitution,” Coleman said. And Belfort has to keep paying in to that fund until the approximately $110 million estimated to be stolen or missing from his former clients has been repaid.

But while Belfort ranks as one of the most prolific and well known securities boiler-room operators of all time, corporate crime techniques evolve so rapidly that now he’s looking like a dinosaur.

“Ultimately, Jordan Belfort may have the distinction of being the last of a dying breed of stock swindlers whose craft has been made obsolete by the Internet,” FBI Agent Coleman told Beach. “The changes brought about by the Internet have not only changed the face of the securities industry, but also the way stocks are promoted and manipulated. There is no longer a need to hire and train hundreds of brokers and cold-callers to pump and dump stocks. Today, the task of contacting millions of prospective victims is done via the Internet with the push of a button.”

Belfort said he doesn’t care about being a financial dinosaur because he has found a new career in writing, a more creative and more fulfilling career than dealing with money all day every day.

Belfort is also starting a lecture tour soon and is considering offers to consult with companies on how to detect and avoid financial fraud.

The Second-Act success in his new life, success built on his life of crime, suggests he is walking, talking proof that indeed crime does sometimes pay.

But the Wolf has a quick answer for that charge too.

“I would be much further along financially if I’d never gotten involved in crime,” he says. “I’d probably be a billionaire by now.”

Contact: paulteetor@verizon.net. 

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