The Iceman of Wall Street

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“Jordan Belfort lined up all 200 employees and said, ‘Some of you are good. Some of you are no good and you need to get the hell out of here’.

This was his management style. Then he walked down the line one by one and would say, ‘you’re good. you stay.’ and then ‘you’re no good. Pack your desk and get the F out.'”

My friend was telling me his story of twenty years ago when he worked for “The Wolf of Wall Street”, Jordan Belfort, played recently in the movie by Leonardo DiCaprio.

“What did he say when he reached you on the line?” I asked.

“He said, ‘you’re good. We need to put people under you.’ I said, No thanks. ‘I don’t give lessons.’.”

I knew my friend had been in that scene in the 90s but I didn’t know he had worked directly for Belfort.

We were eating lunch but I stopped eating and started asking questions. If you ever get me started, I get really curious.

“How did you start working there?”

“It was a small community back then. All the penny stock brokers worked in one area and we’d hang out together and shoot pool. I was known as “the Iceman” because of my name and because I was really good at closing customers. I’d close 7 or 8 good customers, or whales, per week on my good weeks.

“So one day, I was shooting pool at one of the usual bars on Hanover Square and these guys came up to me and said, ‘are you K… [I’m keeping his name private because of what happened later]’ and then they said, ‘we’re from Stratton Oakmont (Belfort’s firm) and we’d like you to work there.’

“I didn’t even look up from the pool table. I said I needed a $30,000 signing bonus, an office, and five cold-callers working for me.”

“Wait a second,” I said, “you wouldn’t do the cold calls yourself? How would the cold-callers know what to do?”

“I had a script for them. They would go through the script and pre-qualify and I’d get on the phone with guys who I knew were whales. You know, big guys.

“So in two days I had my office at Stratton Oakmont. No interview needed. I told my old boss at AS Goldman that I was taking all my clients, but if I wasn’t happy at Stratton I’d leave and be back in a few weeks.”

“Once you got there you just started in? How’d you do?”

“I was doing great. Back then nobody knew what the bid and ask was on a stock unless they read it in the paper the next day. So we’d take all these penny stocks at the end of the day and put out a huge bid so it would show up in the paper and our clients would think they had big gains. Meanwhile, we’d have almost up to 40% commissions per client.”

“But wouldn’t the clients lose money in the end? Wouldn’t they realize it?”

“The smaller ones would. I’d wipe them out so the bigger ones could make money. Don’t forget, this is exactly what Merrill and Fidelity were doing also. We were just ‘small enough to fail’.”

My friend took another bite from his salad. We hadn’t seen each other in a long time and he came up to Cold Spring for the day and we hung out while my kids were in their various dance classes and performances. I love seeing my kids perform but I couldn’t stop listening to this story.

He said, “There was a scene in that movie where they took my cold-calling script actually and acted as if it was Belfort’s script. But I had taught him that cold-calling script.”

“What was it?”

“I shouldn’t say it was all mine. It was going around the street but I had my own changes to it and it worked almost every time. I’d call up a client and say, “Hey Dr. A, this is K, remember we spoke six months ago when Intel was at 32 and I was recommending it? Well now it’s at 60. So I’ve proven myself and now I have another HUGE stock that I think is going to do much better so let’s set up your account and I will get you started.

“The key is,” K said, “Is that I DIDN’T speak to him six months ago. This was the first time I was ever speaking to him. But so many brokers would be calling him all the time he’d have no memory one way or the other.

“So I’d say, ‘I told you back then I would prove myself to you first and now I did so we should get started.” “

Claudia was there. She asked, “What if he said I have to ask my wife.”?

K said, “Ha, that was the most common objection but I would address it before he even brought it up. I would say, “You want to buy that big extension to your house. Who’s going to make the money for that? You are. Who will decorate it? Your wife. This is the biggest stock market boom ever and the stock market is about making you money and buying that house.

“I had another one,” K said, “I would say, if you’re driving down a deserted highway in the middle of the night and your tire goes flat, who would get out of the car and fix it? You or your wife? You would. Some things men do and something women do.”

K said, “Every bank was doing this, by the way. None of them were innocent. We were just doing this with penny stocks. Heck, Bear Stearns was clearing all of our trades. They didn’t make one objection. All the banks were doing the same thing. I was 19 years old, I had no sense of whether what I was doing was right or wrong. I was like a kid.

“I remember the first payment I got. $25,000 in cash. I brought it home and showed my mom. She said, ‘I may just be a hairdresser but I can tell you that nothing good comes out of it when there’s this kind of money all in cash’. But I couldn’t help myself. I really didn’t understand anything then.”

“How long did you stay at Belfort’s firm?”

“Ten days,” K said, “I didn’t like driving up to Long Island. I liked Wall Street. So I went back to AS Goldman in just ten days.”

“Did you give back the $30,000 signing bonus? I mean, you were just there for about a week.”

K laughed. “Of course not.”

“What’s the craziest thing you saw at one of these places?”

K said, “All of these places were heavily mafia. There was so much money going around that all the different mafias were working together. No fighting.

“One time there was a guy in Florida that was heavily shorting a stock we had A LOT of money in. It was a stock that owned a baseball field that was never going to get built and I guess this guy knew it and was bringing down the stock price every day.

“So we invited him up and the head of the firm said ‘We want to be friends and do business with you’

“So the guy from Florida comes up and the next thing I know he’s coming out of the CEO’s office rubbing his neck and blood is all over his face. The CEO comes out and puts his arm around the guy and says, ‘See, now we’re friends. Now I know we can do business together.’

“And then the law eventually caught up with us. I was working at one of the other firms at this time and everyone got arrested. I had the FBI in my house. I was handcuffed. It was in the news. We were all charged and I was facing 12 years. I made bail and that night I was invited to a dinner.

“I went to the dinner and I recognized everyone at the table. All mafia.

“So the next day when I was at the FBI they said, ‘we can get you off without jail time if you give us this guy’ and they showed me a picture and I remembered that dinner and I said, ‘I never saw that guy’ then the FBI would show me a picture of me walking with the guy and I said, ‘I walk with lots of guys. I don’t know who they are.’ This went on for weeks. Sometimes they would keep me overnight in jail cells for a few days just to scare me but I was more scared of the people I saw at that dinner.”

I knew K had never been to jail. I asked him, “How did you avoid jail time?”

He said, “I was 19 years old for one thing. And then Morgenthau [the NYC DA at the time] put this list in front of me and said, ‘these 11 guys are going to testify against you’.

“I went and got a baseball bat and went to the house of everyone on their list and asked them point-blank if they were going to testify against me and they all said ‘No’ and ten of them signed letters saying they weren’t going to testify against me.

“I brought that list and the letters to the judge and the judge threw the whole thing out except for probation with no time served. He specifically said to Morgenthau, ‘why are you trying to put a 19 year old guy in jail?'”

We finished our lunch. I had more questions. I knew K felt bad about everything. We had talked about it before. It was 20 years ago. People change.

Sometimes the problems from yesterday morph into new problems, the problems today. I knew K had his problems but they were much more personal and that was part of the reason K was visiting me that day. K’s almost 40 now. People change and I knew K was making his changes for the better. I knew how he had spent his ‘time served’.

People say to me all the time, ‘how can you hang out with so-and-so’. No matter who I hang out with there is someone always ready to judge them. Or judge me.

I never know the answer. I don’t judge people on what they did 20 years ago. I want to be around people who are good people right now. Who are making positive impacts in the people around them. I can see those impacts. We all were 19 at some point (or 26, or 32, or whatever) and I’m no innocent either. Most people aren’t.

I think about: do I love myself. I don’t judge anyone else.

K’s friend, who had been waiting for him for four hours after driving him 80 miles to my house, picked him up and took him home. There are other parts to this story. There’s a reason K had to visit me this Saturday. He was shaking as he walked into his friends car.

Twenty years of stress and anxiety sometimes add up to something that can’t be hidden. There’s a river of sadness that flows through every story and we only see the surface.

Another time I will tell that story. Because the story always finishes one way or the other.

Reprinted with permission from The Altucher Confidental.

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