The Wolf of Wall Street

by Jordan Belfort

  The last time a person really got under Gladys’s skin was while she was going through the checkout line at Grand Union. One of those typical Long Island Jewish women, with a big nose and the nasty habit of sticking it where it didn’t belong, made the sorry mistake of informing Gladys that she had exceeded the maximum number of items to pass through the express lane and still maintain the moral high ground. Gladys’s response was to turn on the woman and hit her full on with a right cross. With the woman still unconscious, Gladys calmly paid for her groceries and made a swift exit, her pulse never exceeding seventy-two.

  So there was no leap of logic required to figure out why the Blockhead was only a smidgen saner than Danny. Yet, in the Blockhead’s defense, he had had a lot on his plate growing up. His father, who died of cancer when Kenny was only twelve years old, had owned a cigarette distributorship, and, unbeknownst to Gladys, it had been grossly mismanaged—owing hundreds of thousands in back taxes. And just like that, Gladys found herself in a desperate situation: a single mother on the brink of financial ruin.

  What was Gladys to do? Fold up her tent? Apply for welfare, perhaps? Oh, no, not a chance! Using her strong maternal instincts, she recruited Kenny into the seedy underbelly of the cigarette-smuggling business—teaching him the little-known art of repackaging cartons of Marlboros and Lucky Strikes and then smuggling them from New York into New Jersey with counterfeit tax stamps, where they could pick up the difference in the spread. As luck would have it, the plan worked like a charm, and the family stayed afloat.

  But that was only the beginning. When Kenny turned fifteen, his mother realized that he and his friends had started smoking a different type of cigarette, namely, joints. Had Gladys gotten pissed? Not in the least! Without a moment’s hesitation, she backed the budding Blockhead as a pot dealer—providing him with finance, encouragement, a safe haven to ply his trade, and, of course, protection, which was her specialty.

  Oh, yes, Kenny’s friends were well aware of what Gladys Greene was capable of. They had heard the stories. But it never came down to violence. I mean, what sixteen-year-old kid wants a two-hundred-fifteen-pound Jewish mama showing up at their parents’ doorstep to collect a drug debt—especially when she’s sure to be wearing a purple polyester pantsuit, size-twelve purple pumps, and a pair of pink acrylic glasses with lenses the size of hubcaps?

  But Gladys was only getting warmed up. After all, you could love pot or hate pot, but you had to respect it as the most reliable gateway drug in the marketplace, especially when it came to teenagers. In light of that, it wasn’t long before Kenny and Gladys realized there were other economic voids to be filled in Long Island’s teenage drug market. Oh, yes, that Bolivian marching powder, cocaine, offered too high a profit margin for ardent capitalists like Gladys and the Blockhead to resist. This time, though, they brought in a third partner, the Blockhead’s childhood friend Victor Wang.

  Victor was an interesting sort, insofar as him being the biggest Chinaman to ever walk the planet. He had a head the size of a giant panda’s, slits for eyes, and a chest as broad as the Great Wall itself. In fact, the guy was a dead ringer for Oddjob, the hitman from the James Bond movie Goldfinger, who could knock your block off with a steel-rimmed bowler cap at two hundred paces.

  Victor was Chinese by birth and Jewish by injection, having been raised amid the most savage young Jews anywhere on Long Island: the towns of Jericho and Syosset. It was from out of the very marrow of these two upper-middle-class Jewish ghettos that the bulk of my first hundred Strattonites had come, most of them former drug clients of Kenny’s and Victor’s.

  And like the rest of Long Island’s educationally challenged dream-seekers, Victor had also fallen into my employ, albeit not at Stratton Oakmont. Instead, he was the CEO of the public company Judicate, which was one of my satellite ventures. Judicate’s offices were downstairs on the basement level, a mere stone’s throw away from the happy hit squad of NASDAQ hookers. Its business was Alternative Dispute Resolution, or ADR, which was a fancy phrase for using retired judges to arbitrate civil disputes between insurance companies and plaintiffs’ attorneys.

  The company was barely breaking even now—proving to be yet another classic example of a business looking terrific on paper but not translating into the real world. Wall Street was chock-full of these kinds of concept companies. Sadly enough, a man in my line of work—namely, small-cap venture capital—seemed to be finding all of them.

  Nevertheless, Judicate’s slow demise had become a real sore point with Victor, despite the fact that it wasn’t really his fault. The business was fundamentally flawed and no one could’ve made a success of it, or at least not much of one. But Victor was a Chinaman, and like most of his brethren, if he had a choice between losing face or cutting off his own balls and eating them, he would gladly take out a scissor and start snipping at his scrotal sac. But that wasn’t an option here. Victor had, indeed, lost face, and he was a problem that needed to be dealt with. And with the Blockhead constantly pleading Victor’s case, it had become a perpetual thorn in my side.

  It was for this very reason that I wasn’t the least bit surprised when the first words out of the Blockhead’s mouth were, “Can we sit down with Victor later today and try to work things out?”

  Feigning ignorance, I replied, “Work what out, Kenny?”

  “Come on,” he urged. “We need to talk with Victor about opening up his own firm. He wants your blessing and he’s driving me crazy about it!”

  “He wants my blessing or my money? Which one?”

  “He wants both,” said the Blockhead. As an afterthought, he added, “He needs both.”

  “Uh-huh,” I replied, in the tone of the unimpressed. “And if I don’t give it to him?”

  The Blockhead let out a great blockheaded sigh. “What do you have against Victor? He’s already pledged his loyalty to you a thousand times over. And he’ll do it again—right now—in front of all three of us. I’m telling you—next to you, Victor’s the sharpest guy I know. We’ll make a fortune off him. I swear! He’s already found a broker dealer he could buy for next to nothing. It’s called Duke Securities. I think you should give him the money. All he needs is half a million—that’s it.”

  I shook my head in disgust. “Save your pleas for when you really need them, Kenny. Anyway, now is not the time to be discussing the future of Duke Securities. I think this is slightly more important, don’t you?” I motioned to the front of the boardroom, where a bunch of sales assistants were setting up a mock barbershop.

  Kenny cocked his head to the side and looked over at the barbershop with a confused look on his face, but he said nothing.

  I took a deep breath and let it out slowly. “Listen, there are things about Victor that trouble me. And that shouldn’t be news to you—unless, of course, you’ve had your head up your ass for the last five years!” I started chuckling. “You don’t seem to get it, Kenny, you really don’t. You don’t see that with all Victor’s plotting and planning he’s gonna Sun Tzu himself to death. And all his face-saving bullshit—I haven’t got the time or inclination to deal with it. I swear to fucking God!

  “Anyway, get this through your head: Victor—will—never—be—loyal. Ever! Not to you, not to me, and not to himself. He’ll cut off his own Chinese nose to spite his own Chinese face in the name of winning some imaginary war he’s fighting against no one but himself. You got it?” I smiled cynically.

  I paused and softened my tone. “Anyway, listen for a second: You know how much I love you, Kenny. And you also know how much I respect you.” I fought the urge to chuckle with those last few words. “And because of those two things, I will sit down with Victor and try to placate him. But I’m not doing it because of Victor fucking Wang, who I detest. I’m doing it because of Kenny Greene, who I love. On a separate note, he can’t just walk away from Judicate. Not yet, at least. I’m counting on you to make sure he stays until I do what I need to do.”

  The Blockhead nodded. “No problem,” h
e said happily. “Victor listens to me. I mean, if you only knew how…”

  The Blockhead started spewing out blockheaded nonsense, but I immediately tuned out. In fact, by the look in his eyes, I knew he hadn’t grasped my meaning at all. In point of fact—it was I, not Victor, who had the most to lose if Judicate went belly up. I was the largest shareholder, owning a bit more than three million shares, while Victor held only stock options, which were worthless at the current stock price of two dollars. Still, as an owner of stock, my stake was worth $6 million—although the two-dollar share price was misleading. After all the company was performing so poorly that you couldn’t actually sell the stock without driving the price down into the pennies.

  Unless, of course, you had an army of Strattonites.

  Yet there was one hitch to this exit strategy—namely, that my stock wasn’t eligible for sale yet. I had bought my shares directly from Judicate under SEC Rule 144, which meant there was a two-year holding period before I could legally resell it. I was only one month shy of the two-year mark, so all I needed was Victor to keep things afloat a tiny bit longer. But this seemingly simple task was proving to be far more difficult than I’d anticipated. The company was bleeding cash like a hemophiliac in a rosebush.

  In fact, now that Victor’s options were worthless, his sole compensation was a salary of $100,000 a year, which was a paltry sum compared to what his peers were making upstairs. And unlike the Blockhead, Victor was no fool; he was keenly aware that I would use the power of the boardroom to sell my shares as soon as they became eligible, and he was also aware that he could get left behind after they were sold—reduced to nothing more than the chairman of a worthless public company.

  He had intimated this concern to me via the Blockhead, who he’d been using as a puppet since junior high school. And I had explained to Victor, more than once, that I had no intention of leaving him behind, that I would make him whole no matter what—even if it meant making him money as my rathole.

  But the Depraved Chinaman couldn’t be convinced of that, not for more than a few hours at a time. It was as if my words went in one ear and out the other. The simple fact was that he was a paranoid son of a bitch. He had grown up an oversize Chinaman amid a ferocious tribe of savage Jews. In consequence, he suffered from a massive inferiority complex. He now resented all savage Jews, especially me, the most savage Jew of all. To date, I had outsmarted him, outwitted him, and outmaneuvered him.

  It was out of his very ego, in fact, that Victor hadn’t become a Strattonite in the early days. So he went to Judicate instead. It was his way of breaking into the inner circle, a way to save face for not making the right decision back in 1988, when the rest of his friends had sworn loyalty to me and had become the first Strattonites. In Victor’s mind, Judicate was merely a way station to insinuate himself back into the queue, so that one day I would tap him on the shoulder and say, “Vic, I want you to open up your own brokerage firm, and here’s the money and expertise to do it.”

  It was what every Strattonite dreamed of and something I touched upon in all my meetings—that if you continued to work hard and stay loyal, one day I’d tap you on the shoulder and set you up in business.

  And then you would get truly rich.

  I had done this twice so far: once with Alan Lipsky, my oldest and most trusted friend, who now owned Monroe Parker Securities; and a second time, with Elliot Loewenstern, another long-time friend, who now owned Biltmore Securities. Elliot had been my partner back in my ice-hustling days. During the summer, the two of us would go down to the local beach and hustle Italian ices blanket-to-blanket, and make a fortune. We would scream out our sales pitch as we carried around forty-pound Styrofoam coolers, running from the cops when they chased after us. And while our friends were either goofing off or working menial jobs for $3.50 an hour, we were earning $400 a day. Each summer we would each save twenty thousand dollars and use it during the winter months to pay our way through college.

  In any event, both firms—Biltmore and Monroe Parker—were doing phenomenally well, earning tens of millions a year, and they were each paying me a hidden royalty of $5 million a year just for setting them up.

  It was a hefty sum, $5 million, and in truth it had little to do with setting them up. In point of fact, they paid me out of loyalty, and out of respect. And at the very crux of it, what held it all together was the fact that they still considered themselves Strattonites. And I considered them such too.

  So there it was. As the Blockhead stood in front of me, still rambling on about how loyal the Chinaman would be, I knew otherwise. How could someone who harbored a deep-seated resentment toward all savage Jews ever stay loyal to the Wolf of Wall Street? He was a man of grudges, Victor, a man who held every last Strattonite in contempt.

  It was clear: There was no logical reason to back the Depraved Chinaman, which led to another problem—namely, that there was no way to stop him. All I could do was delay him. And if I delayed too long, I ran the risk of him doing it without me—without my blessing, so to speak, which would set a dangerous precedent to the rest of the Strattonites, especially if he succeeded.

  It was sad and ironic, I thought, how my power was nothing more than an illusion, how it would vanish quickly if I didn’t think ten steps ahead. I had no choice but to torture myself over every decision, to read infinite detail into everyone’s motives. I felt like a twisted game theorist, who spent the better part of his day lost in thought—considering all the moves and countermoves and outcomes thereof. It was emotionally taxing, my life, and after five long years it seemed to be getting the best of me. In fact, the only time my mind was quiet now was when I was either high as a kite or inside the luscious loins of the luscious Duchess.

  Nevertheless, the Depraved Chinaman couldn’t be ignored. To start a brokerage firm required a minuscule amount of capital, perhaps half a million at most, which was peanuts compared to what he’d make in the first few months alone. The Blockhead himself could finance the Chinaman, if he so desired, although that would be an overt act of war—if I could ever prove it, which would be difficult.

  In reality, the only thing holding Victor back was his lack of confidence—or his simple unwillingness to put his enormous Chinese ego and his tiny Chinese balls on the line. He wanted assurances, the Chinaman; he wanted direction, and emotional support, and protection against short-sellers—and, most importantly, he wanted large blocks of Stratton new issues, which were Wall Street’s hottest.

  He would want all these things until he could figure them out on his own.

  Then he would want no more.

  That would take six months, I figured, at which point he would turn on me. He would sell back all the stock I’d given him, which would put unnecessary pressure on the Strattonites, who would be forced to buy it. Ultimately, his selling would drive the stocks down, which would lead to customer complaints and, most importantly, a boardroom full of unhappy Strattonites. He would then prey upon that unhappiness—using it to try to steal my Strattonites. He would accompany it with a false promise of a better life at Duke Securities. Yes, I thought, there was something to be said for being small and nimble, as he would be. It would be difficult to defend against such an attack. I was the lumbering giant, vulnerable at the periphery.

  So the answer was to deal with the Chinaman from a position of strength. I was big, all right, and despite being vulnerable at the periphery I was tough as nails at the center. So it would be from the very center that I’d strike. I would agree to back Victor, and I would lull him into a false sense of security, then, when he least expected it, I would unleash a first strike against him of such ferocity that it would leave him destitute.

  First thing first: I would ask the Chinaman to wait three months to give me enough time to unload my Judicate shares. The Chinaman would understand that and suspect nothing. Meanwhile, I would approach the Blockhead and squeeze some concessions out of him. After all, as a twenty percent partner of Stratton, he stood in the way of other Str
attonites who wanted a piece of the pie.

  And once I put Victor into business, I would bring him to the point where he was making decent money but not too much money. I would then advise him to trade in such a manner that would leave him subtly exposed. And there were ways to do that that only the most sophisticated traders would pick up on, ways that Victor certainly would not. I would play right into that giant Chinese ego of his—advising him to maintain large positions in his proprietary trading account. And when he least expected it, when he was at his most vulnerable point, I would turn on him with all my power and attack. I would drive the Depraved Chinaman right the fuck out of business. I would sell stock through names and places that Victor never heard of, names that could never be traced back to me, names that would leave him scratching his panda-size head. I would unleash a barrage of selling that was so fast and so furious that, before he knew what even hit him, he would be out of business—and out of my hair forever.

  Of course, the Blockhead would lose some money in the process, but at the end of the day he would still be a wealthy man. I would chalk that one up to collateral damage.

  I smiled at the Blockhead. “Like I said, I’ll meet with Victor out of respect to you. But I can’t do it until next week. So let’s do it in Atlantic City, when we settle up with our ratholes. I assume Victor’s going, right?”

  The Blockhead nodded. “He’ll be anywhere you want him to be.”

  I nodded. “Between now and then you better straighten the Chinaman’s head out. I’m not gonna be pressured into doing this before I’m good and ready. And that won’t be until after I’ve blown out of Judicate. You got it?”