Last week, I went with a group of other law professors to see The Wolf of Wall Street, based on a book by Jordan Belfort. I have to admit that I did not know anything about the movie before I went other than it was about Wall Street. I was surprised to see at the end that it was based on a true story, which I think is reasonable given that the events depicted in the film are unbelievable.
To say that Wolf is a movie about Wall Street is to say that The Sopranos was a series about the waste management business. Wolf is a movie about a bunch of people knowingly running an illegal enterprise, with stock trading as its cover. In fact, only a few minutes of the movie take place anywhere near Wall Street, but in a bucket shop in Long Island. Now, this wasn't Madoff-type fraud; client money was invested in actual stocks by Belfort's company, Stratton Oakmont. However, the firm was engaging in rampant stock manipulation, making outrageous sums of money. (the 2000 movie Boiler Room was apparently inspired by the downfall of Stratton Oakmont.) In the first few minutes, Belfort's character (played of course by Leonardo DiCaprio) says that he made $49 million when he was 26 years old. (This actually makes no sense to me. Belfort turned 26 in 1988, and we were told that his first day on the job as a stockbroker was Black Monday in October 1987, after which his firm closed and he was out of work for some time. Probably in 1988, he started stock trading on Long Island. Though he made huge sums of money there ($75,000 one week), he probably did not make $49 million a year until he founded Stratton Oakmont, in the 1990s, but then he made much more.)
The main action of the movie seems to take place in the early 1990s, after the 1980s heyday of LBOs and Gordon Gekko, but before the technology boom would shift attention to Northern California. According to Wikipedia, the investigations and indictments that appear in the last part of the movie took place in the late 1990s and early 2000s. Much of the movie is true, including the firm's criminal involvement in the Steve Madden Shoes IPO of 1993, which also sent Steve Madden to jail. Even the most unbelievable moments of the movie are true, including the multiple near-pornographic depictions of office (hotel, plane, pool, etc.) orgies and massive drug and alcohol use. (As has been chronicled everywhere, the movie fought to receive an "R" rating. The fact that the King's Speech and Wolf are both rated R proves that the ratings are meaningless.)
Though director Martin Scorcese, DiCaprio and Belfort have said this movie is a cautionary tale, that characterization is laughable. The downside to Belfort was minimal. He is sent to two years in a minimum security prison, and he laughs this off by telling us that he was a rich man in a place where anything could be bought. Scenes of him playing tennis on the grounds of prison buttress his point. Upon leaving prison, he began life anew as a motivational speaker, and has retained much of his wealth. At the end of Goodfellas, which the movie is intentionally much like, the main character is in the witness protection plan and obviously unhappy. Belfort is not unhappy. Even though he admits at one point in the film that he is a drug addict and a sex addict, these weaknesses are not shown as having much of a negative impact on his life. (His first marriage ended because he fell in love with his second wife; his second marriage ended because he was going to jail.) Belfort off-handedly "reminds" his best friend that he had become sober, but no painful rehab process is shown or even any triggering event. Unlike Wall Street's Bud Fox, he doesn't seem like a kid who got caught up with the wrong people trying to make something of himself but who returns to good values after his tragic downfall. Belfort's downfall is a little bump in the road that doesn't seem to have changed him at all. The real-life Belfort is so untouched that he received $1 million for the movie rights to his book and even appears in the movie at the end. The movie seems to celebrate Belfort's scoundrel-like personality rather than hold him up as a negative example.
I went to the movie thinking that it would be an entertaining piece of instruction for class. If you have seen the film, you know that there is no way to show this in class. There are some interesting issues -- how brokers could make high commissions selling penny stocks because of the spreads, how the spreads were smaller for blue-chips and even worse after decimilization, how a pump-and-dump scheme works, why cold-calling has nearly disappeared, etc. -- but mostly the movie is merely about the excess of a group of folks making money illegally who began to think that they can do anything because they are filthy rich. If you were ever wondering whether there were people who would do anything for money, Wolf will prove it to you. In fact, many of those people appear in the movie.
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