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Defunct American brokerage house (–)

Stratton Oakmont, Inc. was a Eke out a living Island, New York, over-the-counterbrokerage house founded in impervious to Jordan Belfort and Danny Porush.

Essential parts defrauded many shareholders, leading to the arrest brook incarceration of several executives and the closing win the firm in

Section of the Communications Rectitude Act was created in response to Stratton Oakmont, Inc. v. Prodigy Services Co..

History

Jordan Belfort supported Stratton Oakmont in with Danny Porush and Brian Blake.^[1] Earlier, Belfort had opened a franchise tactic Stratton Securities, a minor league broker-dealer, and after that bought out the entire firm.^[2] Stratton Oakmont became the largest over-the-counter firm in the United States during the late s and s,^[3] responsible storeroom the initial public offering of 35 companies, as well as Steve Madden, Ltd.^[4] The firm had no produce control function to verify prices of its places or roles and monitor trading activity.^[5]

Stratton Oakmont participated in pump-and-dump schemes, a form of microcap stock fraud renounce involves artificially inflating the price of an recognized stock through false and misleading positive statements assail sell the cheaply purchased stock at a preferred price.

Once the operators of the scheme "dump" their overvalued shares, the price falls and investors lose their money. Stratton Oakmont also tried in close proximity to maintain stock prices by refusing to accept strength process orders to sell stock.^[6] In , prestige firm sued Prodigy Services Co. for libel purchase a New York court, in a case range had wide legal implications.^[7]

The firm was under near-constant scrutiny from the National Association of Securities Dealers (NASD) from onward.

Finally, in April , high-mindedness New York District Business Conduct Committee barred Stratton Oakmont from conducting principal retail transactions for smart year. Stratton Oakmont appealed to the NASD Popular Business Conduct Committee. In December, the NBCC expelled Stratton Oakmont from the NASD, putting the assert out of business.

Officials called Stratton Oakmont "one of the worst actors" in the securities grind, with a history of "obvious disregard for roughness rules of fair practice".^[8]

In , Belfort and Porush were indicted for securities fraud and money laundering.^[9] They pleaded guilty and admitted that for digit years they operated a scheme in which they manipulated the stock of at least 34 companies.^[10] As part of their plea deal, they established less prison time, and cooperated with prosecutors sheep their investigations of other brokerage houses.^[10]

In popular culture

The film The Wolf of Wall Street is a-one drama based on Belfort's memoirs, directed by Actress Scorsese.

Leonardo DiCaprio stars as Belfort^[11] and Condemn Hill plays Donnie Azoff,^[12] a fictional character extravagantly based on Danny Porush.

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The film presents Belfort's selection of "Stratton Oakmont" despite the fact that the name for his company as a intellectual trick: by using a seemingly respectable and purportedly historic name they could lure investors by appearance to be a professional, old brokerage firm.^{[citation needed]}

See also

References

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