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The Current Wolves Of Wall Street

January 26, 2014: There are essentially two kinds of people who play penny stocks: those who know what they might be in for and those who haven't got the foggiest clue. For the latter, we recommend watching Martin Scorsese's new hit film, "THE WOLF OF WALL STREET", featuring exceptional performances by Leonardo DiCaprio, Jonah Hill, and Matthew McConaughey. In addition to enjoying a thoroughly entertaining 3 hour experience, penny stock players should be looking at this film as a textbook- a "Penny Stocks For Dummies" bit of education. You see, not only does this film chronicle the very real story of Jordan Belfort, it is subliminally screaming out, "Hey you idiots! This is still going on!"

Until the movie, Jordan Belfort was the one of the biggest, if not the biggest, penny stock fraud artist you've never heard of. He was the master of the boiler room in the early 1990s, earning the nickname "The Wolf of Wall Street." The boiler room he created was veiled as a brokerage house known as Stratton Oakmont. His followers/employees were his disciples.

Belfort took young, hungry brokers under his wing. Sometimes they weren't even brokers, but starving, down-on-their-luck go-getters. Some hadn't even graduated from high school. Some were single mothers. Others were drug addicts/pushers. He taught them to cold call and read his scripts and yes, steal by selling garbage. It was a prelude to the Pump & Dump schemes of today where drones earned commission/salaries to drive up the price of stocks, and Belfort and his partners would dump their large control blocks. Then of course, the stock prices would collapse.

Belfort's coup de grace was his IPO of Steve Madden, Ltd. (SHOO), a stock scheme involving a real company but whose backers, and CEO, Steve Madden, had very criminal intentions. Belfort secretly held the control block of SHOO, using Madden himself as his nominee shareholders.  You see, while SHOO was/is a very real company with very real success, Belfort decided that the real money to be made was in the stock and he successfully coerced Madden, who was a childhood friend of Stratton Oakmont co-founder, Danny Porush, into participating in the scheme.  It is a tale that is repeated over and over again even today and a scenario we discuss in an entry from our Pumps & Dumps 101 series.

The "WOLF OF WALL STREET" is not a fairy tale or a piece of ancient history.  It continues to go on right now. Sadly, today Jordan Belfort would be but a blip among all the crooks out there like him. There are 100s of Belforts, Stratton Oakmonts and Steven Madden Ltd.s out there. Belfort has been replaced by the hundreds of like-minded thieves who create scheme after scheme in the flavor-of-the-day industries- today medical marijuana and Bitcoin. Stratton Oakmont has been replaced by the 100s of newsletters and paid analysts who pretend to believe in these schemes. Steve Madden, Ltd. has been replaced by the thousands of overvalued if not worthless tickers that are pumped and then dumped.

Let's have some fun and come up with lists of candidates that might make up the principle subjects of a revamped "THE WOLF OF WALL STREET", freely interchangeable with Belfort, Stratton Oakmont and Steve Madden, Ltd. Of course, the result would be the same. We'll continue to add to the lists and invite you to do the same on our Message Board.

Candidates to replace Jordan Belfort (holders of significant blocks of shares): Bo Linton, Roger Pawson, Robert John Hipple, Henry Jan, Albert Reda, Sandy Winick, David Foley, David and Donna Levy, Tony Papa, Curt Kramer, John Babikian, Javan King, Jim Can, Sherman Mazur, Jehu Hand, Eddy Marin, Nick Kontonicolas, Francisco Abellan

Candidates to replace Stratton Oakmont (the conduit used to push shares): Tobin Smith, Best Damn Penny Stocks, Awesome Penny Stocks, Wilson-Davis & Co., Inc., Ron Goldman, any penny promoter or newsletter you can think of

Candidates to replace Steve Madden Ltd. (the real company whose overvalued shares are pumped):  JBI, Inc., Spongetech Delivery Systems, Inc., Velatel Global Communications, Inc. (VELA), Creative Edge Nutrition, Inc. (FITX)

In an interview with Piers Morgan, Belfort confirms that the film, which is based on his autobiography of the same name, tells a true story.  He expresses his feelings that the film should not glorify or encourage over-indulgence, but offer a constructive critique of greed: “For me it’s important that the movie is viewed the right way, certainly as a cautionary tale.”