After watching The Wolf Of Wall Street I have to ask, what did Jordan Belfort do criminally wrong exactly?
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Pump and dump.
Sell a junk stock to as many people as possible who don’t understand stocks or persuade them to keep it rather than sell it. This is the pump.
Once the value is high enough, the stocks are then sold off quickly, devaluing their worth almost instantly. This is the dump.
Belfort capitalized financially because of the fees he collects on sells. By initiating a sell when the price was high enough, this is where he broke the law.
It’s a form of insider trading, but wholly manipulated by the stock broker.
It’s illegal, but due to the inability for the SEC to impose serious fines and imprisonment, it’s getting worse.
Belforts is a testament to this. Despite being arrested and fined, he still made millions.
It’s ridiculous to think a punishment system issuing fines in the millions will change the behavior of those making billions.
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