When we were first sued, we had each retained separate legal counsel to avoid potential conflicts. At the time I had considered it a serious waste of money; now I was glad we had. I shrugged my shoulders and said, “I’m sure their offer isn’t going away anytime soon, Ike. Like you said, we wore them out. In fact, I don’t think there’s anyone left at the SEC who even knows anything about my case.” I was tempted to explain to him why I was so certain of that (my bug in the conference room), but I decided not to.
Ike the Spike threw his hands in the air and rolled his eyes up in his head. “Why do you wanna look a gift horse in the mouth, huh? The SEC’s New York office has had huge turnover in the last six months, and morale is low. But that’s only by coincidence, and it won’t last forever. I’m talking to you like a friend now, Jordan, not your lawyer. You gotta settle this case once and for all, before a new set of investigators steps in and takes another crack at it. Eventually one of them might find something; then all bets are off.”
I nodded slowly and said, “It was smart of you to keep this between us. If news leaks out before I have a chance to address the troops, they might panic. But I’ll tell you that the thought of taking a lifetime bar doesn’t exactly thrill me, Ike. I mean—to never set foot in the boardroom again! I don’t even know what to say about that. That boardroom is my lifeblood. It’s my sanity, and it’s also my insanity. It’s like the good, the bad, and the ugly all rolled up into one.
“Anyway, the real problem isn’t gonna be with me; it’s gonna be with Kenny. How am I gonna convince him to take a lifetime bar when Danny’s staying behind? Kenny listens to me, but I’m not sure he’ll listen if I tell him to walk away while Danny’s allowed to stay. Kenny’s making ten million dollars a year; he may not be the sharpest tool in the shed, but he’s still smart enough to know that he’s never gonna make this kinda money again.”
Ike shrugged and said, “So let Kenny stay behind and have Danny take the bar. The SEC couldn’t care less which of them stays and which of them goes. As long as you’re gone, they’re happy. All they want is to make a nice fat press release saying the Wolf of Wall Street is out of their hair, and then they’ll be at peace. Would it be easier to convince Danny to leave?”
“That’s not an option, Ike. Kenny’s a f**king moron. Don’t get me wrong, I love the guy and everything, but that doesn’t change the fact that he’s incapable of running the firm. Tell me how this would play out if we agreed to settle.”
Ike paused, as if to gather his thoughts. After a few seconds he said, “Assuming you can convince Kenny, then both of you would sell your stock to Danny and then sign court orders permanently barring you from the brokerage business. The money for your fines can come directly out of the firm, so you won’t have to take a dime out of your pocket. They’ll want an independent auditor to come down to the firm and do a review and then make some recommendations. But that’ll be no big deal; I can handle that with your compliance department. And that’s it, my friend. It’s very straightforward.”
Ike added, “But I think you’re putting too much stock in Danny. He’s definitely sharper than Kenny, but he’s stoned half the time. I know you enjoy your partying too, but you’re always in good shape during business hours. Besides, for better or worse, there’s only one Jordan Belfort in the world. And the regulators know that too—especially Marty Kupperberg, who’s running the New York office right now. That’s why he wants you out. He might despise everything you stand for, but he still respects what you’ve accomplished. In fact, I’ll tell you a funny story: A couple of months ago, I was down at an SEC conference in Florida, and Richard Walker—who’s the number-two man down in Washington right now—was saying that they need a whole new set of securities laws to deal with someone like Jordan Belfort. It got quite a chuckle from the audience, and he really hadn’t said it in that derogatory a fashion, if you know what I mean.”
I rolled my eyes. “Oh, yeah, Ike, I’m real proud of that; real proud, indeed! In fact, why don’t you go call my mother and tell her what Richard Walker said? I’m sure she’ll be very thrilled at the awesome respect her son inspires among the nation’s top securities cop. Believe it or not, Ike, there was a time not that long ago when I was a nice Jewish boy from a nice Jewish family. Seriously. I was the kid who used to shovel driveways after snowstorms to make extra money. It’s hard to imagine that less than five years ago I was able to walk into a restaurant without people looking at me funny.”
I began shaking my head in amazement. “I mean—Jesus!—how the f**k did I let this whole thing spiral so far out of control? This wasn’t what I intended when I started Stratton! I swear to God, Ike!” With that, I rose from my chair and stared out the plate-glass window at the Empire State Building. It wasn’t all that long ago when I’d first gone to Wall Street as a stockbroker trainee, was it? I had taken the express bus—the express bus!—and had only had seven dollars left in my pocket. Seven f**king dollars! I could still remember the feeling of looking at all those other people and wondering if they felt as bitter as I did about having to take a bus to Manhattan to eke out a living. I remembered feeling bad for the older people—that they had to sit on those hard plastic seats and smell the diesel fumes. I remembered swearing I would never let myself end up that way, that somehow I would become rich and live life on my own terms.
I remembered getting off the bus and staring up at all those skyscrapers and feeling intimidated at the very power of the city, even though I had grown up just a few miles outside Manhattan.
I turned and faced Ike, and with nostalgia in my voice I said, “You know, Ike, I never wanted it to end up this way. I tell you the truth: I had good intentions when I started Stratton. I know that doesn’t mean a lot right now, but, still…that really was the case five years ago.” I shook my head once more and said, “I guess the road to hell is paved with good intentions, just like they say. I’ll tell you a funny story, though: Do you remember my first wife, Denise?”
Ike nodded. “She was a kind, beautiful lady, as is Nadine.”
“Yes. She was kind and beautiful, and she still is. In the beginning, when I started Stratton, she had this classic line. She said, ‘Jordan, why can’t you get a normal job making a million dollars a year?’ I thought it was pretty funny at the time, but now I know what she was talking about. You know, Stratton’s like a cult, Ike; that’s where the real power is. All those kids look to me for every little thing. That was what was driving Denise crazy. In a way, they deified me and tried turning me into something I wasn’t. I know that now, but back then it wasn’t so clear. I found the power intoxicating. Impossible to refuse.
“Anyway, I always swore to myself that if it ever came down to it, I would fall on my sword and sacrifice myself for the sake of the troops.” I shrugged my shoulders and smiled weakly. “Of course I always knew that was somewhat of a romantic notion, but that was how I’d always envisioned it.
“So I feel like if I throw in the towel right now and take the money and run, then I’m f**king over everyone; I’m leaving the brokers high and dry. I mean, the easiest thing for me would be to do what you said: take a lifetime bar and go off into the sunset with my wife and daughter. God knows I have enough money for ten lifetimes. But then I’d be f**king over all those kids. And I swore to every last one of them that I’d fight this thing to the bitter end. So how do I just pick up now and hightail it out of town—just because the SEC is giving me an exit ramp? I’m the captain of the ship, Ike, and the captain is supposed to be the last one off the boat, no?”
Ike shook his head. “Absolutely not,” he replied emphatically. “You can’t compare your SEC case to an adventure at sea. The simple fact is that by taking the bar you ensure the survival of Stratton. No matter how effective we are at foiling the SEC’s investigation, we can’t delay this thing forever. There’s a trial date in less than six months, and you’re not gonna find a jury of your peers very sympathetic to your cause. And there’re thousands of jobs at stake, as well as countless families who depend on Stratton for their financial existence. By taking the bar you secure everybody’s future, including your own.”
I took a moment to consider Ike’s wisdom, which was only partially true. In point of fact, the SEC’s offer wasn’t really that much of a surprise to me. After all, Al Abrams had predicted it. It had been at one of our countless breakfast meetings at the Seville Diner. Al said, “If you play your cards right, you’ll wear the SEC down until there’s no one left in the office who knows anything about your case. The turnover there is mind-boggling, especially when they get caught up in an investigation that’s not going well.
“But never forget,” he added, “that just because they settle, it doesn’t mean it’s over. There’s nothing to stop them from coming right back at you with a new case the day after you settle the old one. So you need to get it in writing that there’re no new cases pending. And even then there’s still the NASD to contend with…and then the individual states…and then, God forbid, the U.S. Attorney’s Office and the FBI…although chances are they would’ve already gotten involved if they were planning to.”
With the wisdom of Al Abrams still in my mind, I asked Ike, “How do we know the SEC isn’t planning on coming right back at us with another lawsuit?”
“I’ll have it worked into the agreement,” Ike replied. “The settlement will cover all acts up to the present. But remember—if Danny goes off the reservation again, there’s nothing to stop them from bringing a new case going forward.”
I nodded slowly, still unconvinced. “And what about the NASD…or the states…or, God forbid, the FBI?”
Sorkin the Great leaned back in his throne and crossed his arms once more, and he said, “There’s no guarantee on that. I’m not gonna mislead you. It would be nice if we could get something like that in writing, but it doesn’t work that way. If you want my opinion, though, I’ll tell you that I think the chances are very slim that any other regulator will pick the case up. Remember, the last thing any regulator wants is to get involved with a losing case. It’s a career killer. You saw what happened to all the lawyers the SEC assigned to the Stratton case: Every last one of them left the office in shame, and I can assure you that none of them got generous offers in the private sector. Most SEC lawyers are just there to gather experience and develop a track record. After they’ve made a name for themselves, they move on to the private sector, where they can make some real money.
“Now, exempt from that is the U.S. Attorney’s Office. They’d have a lot more luck with the Stratton investigation than the SEC had. Funny things start to happen when criminal subpoenas are floating around. All those stockbrokers who were subpoenaed down to the SEC and supported you so admirably…well, they probably would’ve jumped ship if those same subpoenas had come from a grand jury.