|Industry||Investment banking, stock exchange|
|Headquarters||Long Island, New York, United States|
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.
|This section needs additional citations for verification. (November 2014)|
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 opened a franchise of Stratton Securities, a minor league broker-dealer, and then bought out the whole firm. Stratton Oakmont was the largest OTC firm in the country during the late 1980s and 1990s. 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 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. Stocks that are the subject of pump and dump schemes are sometimes called "chop stocks".
The firm was the subject of numerous disciplinary actions brought by the NASD beginning in 1989. The firm was shut down in 1996, and in 1998 Belfort and Porush were indicted for securities fraud and money laundering.
In popular culture
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 and Jonah Hill plays fictional character Donnie Azoff, who is loosely based on Danny Porush.
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- Stratton Oakmont, Inc. v. Prodigy Services Co., No. 31063/94, 1995 WL 323710, 1995 N.Y. Misc. LEXIS 229 (N.Y. Sup. Ct. 1995).
- "NASD Regulation Expels Stratton Oakmont; Principals Also Barred". FINRA. December 5, 1996. Retrieved 2015-01-11.
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