boiler rooms

“I’ve redeemed myself. I do the right thing every day,” he told a packed auditorium Wednesday night at an event run by New York University’s School of Law and the 92nd Street Y. “I’m turning over all the profits to people who lost money.” Belfort is required to pay back $110 million in restitution to his victims, although he still refers to them as “investors.” So far he’s handed over about $11 million…”If you want to hang on to mistakes I made 25 years ago, that’s your prerogative,” he said. [WPTV]

Vin Diesel Could’ve Been King Of The Cold Call

David Glass, 39, was still on probation for insider trading when he co-founded Yellowstone Capital LLC, a New York-based brokerage and lender that originated $200 million in loans last year, including for OnDeck. He said he learned to sell in the 1990s at Sterling Foster & Co., a Long Island firm where he got his friend a job interview that inspired “Boiler Room,” a movie that portrayed a college dropout’s foray into high-pressure stock sales. Glass said he coached actor Vin Diesel on cold-calling for the film. “A natural,” Glass said. [Bloomberg]

Twenty years after Jordan Belfort and his Stratton Oakmont Inc. defrauded investors out of more than $200 million from its offices on Long Island — a story retold in the movie “The Wolf of Wall Street” — New York’s financial district has become a hub for veterans of defunct boiler rooms who use decades-old scripts to pressure investors into speculative trades, more than 40 current and former brokers said in interviews…Today, computerized records make it easier for regulators to unravel fraud. The federal do-not-call list, established in 2003, has both limited phone solicitation and made it less socially acceptable. Most people know they can trade stocks online for about $10 and want to look up a brokerage on Google before sending money, the brokers said…That doesn’t stop brokers from trying. Armed with only the names of business owners on index cards, trainees call, tout their Wall Street addresses and say their boss will call back with one good stock tip. Hundreds of people hang up for each one willing to listen to the pitch, brokers said. “There could be days when you’re dialing nonstop, and nothing,” said Jorge Ferreira, 40, a broker at Blackwall. [Bloomberg]

Over at the Post today you will find a first-person account of what it was like to work in Stratton Oakmont, the boiler room that is the subject of ex-con Jordan Belfort’s memoir and Martin Scorsese’s upcoming movie, starring Leonardo DiCaprio as the wolf. Josh Shapiro walks us through his time at Stratton, beginning with his first impressions (“…no sign that says Stratton Oakmont or anything but there’s a line of cars — Rolls-Royces, Bentleys, Lamborghinis, Ferraris, Porsches, Mercedes. And I’m like ‘Whoa!’ It looked like a car show. I’ve never seen cars like this. I didn’t have a driver’s license yet.”) through leaving just months before the Feds raided the place and his bosses got upwards of 39 months in prison. In between he “worked [his] tail off” cold calling potential customers, was told he was a loser who should kill himself if he didn’t land enough, met a hooker with a heart of gold, and rescued another woman from a life of blowing 40 guys in one sitting by dating her for over a year. This is his story. Read more »

Anastasios “Tommy” Belesis, he of John Thomas Financial, of “Give me just 1% of your trust and confidence and I will earn the other 99%“, of not letting junior brokers sit down, of using Rocky to get pumped up for cold calls, of screening Boiler Room at the office, of sending employees who show up to work sporting stubble to the men’s room to shave, of “f–k you, you’re done in this business, you’re done in this business, get the f–k out of here“, and of threatening to run someone over “in the street“, has been barred from the brokerage industry for 1 year, at which time he’ll have to reapply.

Technically, he could tap on the window of various brokerage shops, gesture for someone, anyone to come over, and then threaten to run them over; he could text brokers he used to work with and tell them they’d better look both ways; but he won’t be doing any of these things in an official capacity. In the meantime, he’ll have to keep his game sharp by threatening to gun it over the waiter who moves at a glacial place bringing him his jack and coke, his neighbor who dares to bring up the matter of Belesis’s toy poodle constantly shitting on everyone else’s lawn, and Oliver Stone, whose movies he’ll now have much more time to appear in but who will make the mistake of asking Belesis to pay for his method acting classes out of his own pocket. Read more »

Jordan Belfort, aka the Wolf of Wall Street, hates it when people describe him as a criminal. “‘Convicted stock swindler’—it’s like it hurts my heart,” he says, practically shuddering. “I know it was true, but it’s not who I am. I say to my son, I say it to everybody who I try to mentor: We are not the mistakes of our past. We’re the resources and capabilities that we glean from our past. And it’s so true.” [BusinessWeek]

Would it surprise you to know that a boiler room operation that doesn’t let junior employees sit down would instruct its employees to cold call potential investors using lines from a script that include such “power phrases” as “This account will come back to you in spades” and “Give me just 1% of your trust and confidence and I will earn the other 99%”? That a place whose founder thought making cameos in Shia LaBeouf movies was a good idea would tell those same employees to say things like “If I am half right, we go out for a steak dinner on you…is that fair enough?”? That that same founder, who has been charged with fraud, in addition to intimidation and harrassment (because he threatened to run over a broker), would coach his staff to respond to someone saying they need to discuss a possible investment with their wife with the line “Let’s face it, if you go home and tell your wife that you want to invest with a broker whom you don’t know very well, chances are you will be hit with a frying pan and spend the night on the couch”? Probably not! And, yet, it is still an amazing thing to behold. John Thomas Financial’s full pitchbook of proprietary comebacks and “closers” can be found here. Our favorites: Read more »

Head trader and Wharton grad

Remember Gryphon Financial, the boiler room scam operated by Kenneth Marsh that claimed to have a “hardcore business” run by a ten-man trading desk who “beat up hedge funds” together and of whom no less than George Soros supposedly said “Alone, the Gryphon Financial are incredible, together they are unstoppable”? Much of that turned out not to be true in the strict sense of “occurring in physical reality.” But as Marsh’s lawyers have explained in court, Gryphon’s advertised team-based approach was not entirely fake, either, insofar as a whole roster of personalities inhabited Marsh’s mind:
Read more »