Leonardo DiCaprio plays Jordan Belfort in The Wolf of Wall Street.
One of the techniques Jordan Belfort teaches in his salesmanship seminars is to create an "atmosphere of complicity". The way to close a deal, he says, is to draw the customer into a series of "micro-agreements" so that gradually they come to believe they are on the same side.
It is only when I walk away from our meeting, on a warm day in Los Angeles, that I realise he is still up to the same tricks.
Belfort may be clean living and sober now but he used to be the embodiment of Wall Street excess – so much so that Martin Scorsese has made a film about him, due for release next year.
Jordan Belfort. Photo: Louise Kennerley
In the trailer for The Wolf of Wall Street, his character, played by Leonardo DiCaprio, is seen taping money to naked women to smuggle it out of the country, staging "midget-toppling" contests in his office and entertaining prostitutes by the dozen. None of it is fiction.
As the founder of Stratton Oakmont, a brokerage firm, he defrauded investors of more than $US100 million and then turned in his co-conspirators to cut his own jail term. His firm was closed in 1998 and he served 22 months in prison.
Belfort also spent seven years high on cocktails of sedatives, cocaine, crack and ecstasy, during which he pushed his wife down the stairs, sexually molested a flight attendant and put his three-year-old daughter in a car without a seatbelt, and promptly crashed the car through a garage door.
Jordan Belfort with Anne Koppe at the Melbourne Cup in 2011. Photo: Eddie Jim
Yet, many of the people he should count as enemies are now friends. The judge who sent him to jail recently invited him to speak to 500 prosecutors, and praised him as one of the few convicts he knew would turn his life around. Belfort has also become close to the FBI agent who nailed him for fraud.
"He's very nice. I speak to him all the time. I love him!" says Belfort. "People at the FBI are smart. They get it".
Smart as paint
That Belfort is also smart is evident. As the child of accountant parents in a small apartment in Queens, New York, he used to entertain himself with number games. "I had this obsession with adding and subtracting and multiplying numbers. I used to look at the clock and multiply the hands," he says. "I was getting anxiety attacks and used [this] to train myself to fight sleep."
He realised early on that he wanted to be wealthier than his parents were and that he had a knack for sales. When he was a university student, he would make $US400 a day selling ice cream on Long Island beaches. He later started a meat business, which suffered from over-expansion and failed.
Then he turned to stocks. After a few years working for other firms, he set up his own brokerage. By 26 he was earning close to $US1 million a week. He once earned $US12.5 million in three minutes.
Although Belfort was known as the "wolf of Wall Street" his firm was a long way from Wall Street and the traditional Wall Street model.
It was based in Long Island, where Belfort drilled his staff on how to close deals using the "straight line" method which he still teaches today – a set of pre-determined steps from first contact "straight" to the sale.
Instead of blue-chip companies, Stratton Oakmont specialised in inexpensive stocks, about $5 and $10, which were overlooked by traditional Wall Street firms.
Belfort kept his staff loyal by stoking their appetite for money. The basement of the building was devoted to their exotic cars, prostitutes, visiting drug dealers, and other entertainments, including naked marching bands.
"I went into Wall Street naive as a babe in the woods. [But] things happen slowly to you," he says. "You just don't notice it happening as much.
"You know the old story: you take a mouse and you put it in a pot of boiling water and it will jump out. You slowly turn up the heat, and it will boil to death without knowing it.
"I'd cracked the code for training salesmen. Put that together – an untapped market, cracking the code for training people and motivating them, and an ethical lapse which was probably somewhat about Wall Street at the time . . ." He trails off.
His sales technique might have been effective but Belfort's ability to come up with new stock to sell was less so. He floated more than 20 companies, including Steve Madden, the American shoe chain which is still worth $US2.6 billion. Some of the firms were worth investing in but others, he admits, were "crappy".
He draws parallels with the subprime housing disaster. "You run out of the good mortgages."
But Stratton Oakmont did not rely only on poor-quality issues. Belfort also turned to fraud.
He persuaded friends outside the company to act as "rat holes", handing them stakes in each new issue, which would belong to that person on paper but which, in fact, would be Belfort's money and Belfort's stake.
By restricting the supply of shares, he could pump up the price of the companies – and cash out at the top of the bubble he had created.
"There was lots of it on Wall Street," he says. "A lot of people were jailed for it after I was, at big firms and small firms. It was no doubt that Gordon Gekko-esque time." Although Belfort says he feels daily guilt about the money he defrauded, he sees a gulf of difference between his wrongdoing and that of other high-finance villains such as Bernard Madoff.
"Madoff is a complete crook," he says. "He was just taking people's money. I took [tens] of companies public – 95 per cent of those were totally legit, just this one thing that was illegitimate.
"I don't want to come off like what I did was not wrong. It was wrong. But I wasn't dealing with poor people, I was dealing with very rich people. No one lost their life savings."
For Belfort, the world of high finance will always have an immoral faction. The Libor and currency manipulation scandals of the past few years were no surprise, he says. "It's not going to stop. As much as it's part of Wall Street, it's part of the human condition. It's how we're built. It'll be a bit different next time, and we'll say: 'We never saw it coming!' for the 50th time."
These days, the reformed Belfort thinks long-term financial success can come only to those who are ethical. "Long term, scumbags don't make money. They get in trouble, and they do drugs, and they feel guilty about it. I believe in karma. If I could do it over, I would definitely take a completely different path."
Sitting in a modest hotel overlooking the Pacific, his sales patter is so earnest, he may well have convinced himself he is thoroughly contrite. Under the terms of his release, Belfort is obliged to devote half his earnings to paying back $US104 million to the investors he defrauded. He speaks at length about the guilt he feels.
The estimated $US1 million he received for the movie rights to his life will go towards his victims, he says.
Certainly, his story will make good cinematic drama but some fear it will inspire a new generation of Gordon Gekkos. Belfort's autobiography is already passed around the City of London as required reading.
Kweku Adobole, the rogue trader who put a $US1.5 billion hole in UBS's balance sheet and was jailed for fraud last year, cited it as his favourite book.
"I almost died when I read that!" says Belfort, though he says most young financiers see it as a cautionary tale.
Recounting some of the taller tales, for a moment Belfort's sober front is gone. "If I could have done this and not lost all the money, I'd say I wouldn't change a thing."
The Telegraph, London