I was a 15 year old when I first seen the movie The Wolf of Wall Street. At the time, I was fascinated by the movie due to the glamour of his lifestyle and riches for at the time I did not question whether his behaviour was ethical or not. Revisiting the film as an OB student, the unethical practices of how Jordan Belfort got his riches became prevalent.
Martin Scorsese’s film was based on the real life of Jordan Belfort. He made his riches by selling fraudulent securities in a pump and dump scam and by doing so, he amassed a huge fortune in a small period of time. A pump and dump scam is “a scheme that attempts to boost the price of a stock through recommendations based on false, misleading or greatly exaggerated statements”. Because the firm usually holds stock in the company before, they sell the shares at the inflated price which makes the firm rich but the customers lose their money. Belfort became rich at the expense of his clients, many of whom were ordinary, working-class people his firm cold-called. The finance industry in the 80’s relied heavily on the large grey-area of the law, allowing them to get away easier with this unethical behaviour.
Though Jordan Belfort made “over $200 million” from selling fraudulent securities, we have to give credit where credit is due. He was able to build up Stratton Oakmont from a small boiler room trading firm to an anchor in Wall Street with “over 1000 employees”. He was able to expand his company so quickly because he was able to satisfy his employee’s extrinsic and intrinsic needs. According to Maslow’s Hierarchy of Needs, “people are motivated to achieve certain needs and that some needs take precedence over others”. The needs, listed in order that need to be fulfilled first, are physiological needs, security needs, social needs, esteem needs, and self-actualization. He was able to satisfy his employees’ extrinsic needs through the high commission his model allowed them to have. And he was able to provide a sense of purpose to his employees through his gift of motivating others with his speeches which fulfilled their higher needs. He tells his employees to “deal with your problems by becoming rich” which gives them the purpose of accruing as much wealth as possible. By satisfying all of his employees’ needs Jordan Belfort was able to build his own empire.
References:
http://time.com/104734/jordan-belfort-real-wolf-of-wall-street/
https://www.mindtools.com/pages/article/newLDR_74.htm