Stratton Oakmont

Stratton Oakmont Inc
Brokerage House
Industry Investment banking, stock exchange
Founded 1989
Founder Jordan Belfort
Defunct December 1996
Headquarters Lake Success, Long Island, New York, United States
Area served
United States
Key people
Revenue $149,000,000

Stratton Oakmont, Inc. was a Long Island, New York, "over-the-counter" brokerage house founded by Jordan Belfort. It defrauded many shareholders leading to the arrest and incarceration of several executives, and the closing of the firm.


Jordan Belfort founded the firm of Stratton Oakmont in 1989 with Danny Porush.[1][2] Earlier, Belfort opened a franchise of Stratton Securities, a minor league broker-dealer, and then bought out the entire firm.[3] Stratton Oakmont was the largest OTC firm in the country during the late 1980s and 1990s.[4] The firm was responsible for the initial public offering of 35 companies, including Steve Madden Ltd.[5] Stratton Oakmont did not have a product control function to verify prices of its positions and monitor trading activity.[6] Stratton Oakmont participated in pump and dump schemes, a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme "dump" their overvalued shares, the price falls and investors lose their money. Stratton Oakmont would also try to maintain the price of a stock by refusing to accept or process orders to sell the stock.[7] Stocks that are the subject of pump and dump schemes are sometimes called "chop stocks".[8]

In 1995, the firm sued Prodigy Services Co. for libel in a New York court, in a case that had wide legal implications.[9]

The firm was the subject of numerous disciplinary actions brought by the NASD beginning in 1989.[10] The firm was shut down in December 1996, and in 1999 Belfort and Porush were indicted for securities fraud and money laundering.[11]

Belfort and Porush later pleaded guilty to ten counts of securities fraud and money laundering, admitting that for seven years they operated a scheme in which they manipulated the stock of at least 34 companies.[12] As part of their plea deal, they received less prison time, and cooperated with prosecutors in their investigations of other brokerage houses.[12]

In popular culture

The 2013 movie The Wolf of Wall Street is a drama based on the memoirs of Jordan Belfort, directed by Martin Scorsese. Leonardo DiCaprio stars as Jordan Belfort[13] and Jonah Hill plays fictional character Donnie Azoff,[14] who is loosely based on Danny Porush.

See also


  1. "The Wolf of Wall Street (2013)". History vs. Hollywood. Retrieved August 5, 2015.
  2. Milord, Joseph (December 31, 2013). "The Wolf Of Wall Street Method: How He Cheated His Way To Riches". Elite Daily. Retrieved August 5, 2015.
  3. Haglund, David (December 31, 2013). "How Accurate Is The Wolf of Wall Street?". Slate. Retrieved 2015-01-11.
  4. Park, Sang (February 6, 2014). "Cinema Weekly: The Wolf of Wall Street". The Exonian. Retrieved August 5, 2015.
  5. "Meet Jordan Belfort the real Wolf of Wall Street". Interview & Review. May 14, 2014. Retrieved August 5, 2015.
  6. Schwartz, Bob (June 11, 1991). "Trade Group Probing Stock Sales of 3 Firms : Inquiry: Offerings of International Physical Systems, Ropak Laboratories and DVI Financial were underwritten by a brokerage being investigated.". Los Angeles Times. Retrieved August 5, 2015.
  7. Mulligan, Thomas S. (April 17, 1997). "Investor Wins $10 Million in Penny-Stock Broker Case". Los Angeles Times. Retrieved 2015-01-11.
  8. "Pump and Dump Schemes". U.S. Securities and Exchange Commission. March 12, 2001.
  9. Stratton Oakmont, Inc. v. Prodigy Services Co., No. 31063/94, 1995 WL 323710, 1995 N.Y. Misc. LEXIS 229 (N.Y. Sup. Ct. 1995).
  10. "NASD Regulation Expels Stratton Oakmont; Principals Also Barred". FINRA. December 5, 1996. Retrieved 2015-01-11.
  11. Stefania Bianchi; Mahmoud Habboush (19 May 2014). "Wolf of Wall Street Belfort Is Aiming for $100 Million Pay". Bloomberg. Retrieved 21 May 2014.
  12. 1 2 Wyatt, Edward (September 24, 1999). "Stratton Oakmont Executives Admit Stock Manipulation". New York Times. Retrieved August 5, 2015.
  13. Nashawaty, Chris (17 February 2011). "Leonardo DiCaprio and Martin Scorsese teaming up again for 'The Wolf of Wall Street. '". Entertainment Weekly. Retrieved 17 January 2011.
  14. Sacks, Ethan (June 17, 2013). "'The Wolf of Wall Street' Trailer Released Shows Leonardo DiCaprio at Debaucherous Best". Daily News, LP. Retrieved June 19, 2013.
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