Stratton Oakmont

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Stratton Oakmont Inc
Former type Brokerage House
Industry Investment banking
Founded 1985
Founders Jordan Belfort
Defunct 1996
Headquarters Long Island, New York, United States
Area served United States
Key people Jordan Belfort; CEO
Danny Porush: VP
Kenneth Greene

Stratton Oakmont, Inc. was a Long Island, New York, "over-the-counter" brokerage house known primarily for the defrauding of many shareholders eventually leading to the downfall of several executives and the closing of the firm.


While Jordan Belfort is widely accepted as being the primary founder, some sources[which?] hold that Danny Porush was a lone co-founder while other sources[which?] state Belfort and Porush were just two of many co-founders. Still other sources claim that Belfort was hired, and then with partners bought-out, an original founder/owner.[1] Stratton Oakmont was the largest OTC firm in the country during the late 1980s and 1990s.[citation needed] The firm was responsible for the initial public offering of 35 companies, including Steve Madden Ltd., Hemesphere Biopharma, Dualstar Technologies, D.V.I. Financial, Paramount Financial, M. H Meyerson & Co., Czech Industries, M.V.S.I. Technology, Questron Technologies, and Etel Communications.

Stratton Oakmont did not have a Product control function to price-verify positions and monitor trading activity.[citation needed]

Stratton Oakmont participated in pump and dump schemes, a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme "dump" their overvalued shares, the price falls and investors lose their money. Stratton Oakmont would also try to maintain the price of a stock by refusing to accept or process orders to sell the stock.[2] Stocks that are the subject of pump and dump schemes are sometimes called "chop stocks".[3]

In 1995, the firm sued Prodigy Services Co. for libel in a New York court, in a case that had wide legal implications.[4]

The firm was the subject of numerous disciplinary actions brought by the NASD beginning in 1989. [5] The firm was shut down in 1996, and in 1998 Belfort and Porush were indicted for securities fraud and money laundering.[6]

Media Depictions[edit]

Boiler Room[edit]

The 2000 Ben Younger film Boiler Room follows a young stockbroker's ride with a firm remarkably similar to Stratton Oakmont. While Younger has never actually confirmed Stratton Oakmont was the real inspiration for Boiler Room, the similarities are so numerous that many have reported that this is the case.[7]

The Wolf of Wall Street[edit]

The 2013 movie, The Wolf of Wall Street is a drama based on the memoirs of Jordan Belfort, directed by Martin Scorsese. Leonardo DiCaprio stars as Jordan Belfort[8] and Jonah Hill plays fictional character Donnie Azoff,[9] who is loosely based on Danny Porush.

See also[edit]