The "Wolf of Wall Street" is teaching lessons on trading - but can he be trusted?

Jordan Belfort, better known as ‘The Wolf of Wall Street’ portrayed by Leonardo di Caprio in the hit 2013 Scorsese film of the same name, is sharing his insights with new traders in a video series with RagingBull. “Our members all know the Wolf of Wall Street, so we thought it would be beneficial for the rookies to learn from his experiences to become more successful traders in the long run," Jeff Bishop, chief executive of the US investing website, explained in a press release.

Anybody that is familiar with Belfort will also be aware of his huge notoriety. In addition to his wild sex and drug-fuelled escapades, the 58-year-old cheated investors at his brokerage Stratton Oakmont out of approximately $200 million. Belfort was indicted for securities fraud and money laundering in 1999 for which he served 22 months in prison.

Though he may have reinvented himself in the decades since, should new traders really trust the lessons of someone with Belfort’s reputation?

Could attending his lessons be risky?

Understandably, many people are wary of taking any kind of financial advice from Belfort in light of his history. Back in 2017, US News reported that he had warned investors that initial coin offerings (ICOs) were “the biggest scam ever” and “far worse than anything [he] was ever doing”. In response to this, reporter Wayne Duggan wrote: “Whether or not the advice is sound is virtually irrelevant. Why are investors taking advice from convicted Wall Street con artist Jordan Belfort?” Particularly when there are so many distinguished, reputable voices to consider instead.

However, in the case of Belfort’s video series, RagingBull has insisted that “Jordan is not a licensed or registered investment advisor or broker and he will not be giving advice on specific stocks, companies, or investment strategies.” This is unlike Nick Leeson, for example, who was also sent to prison for fraud and now lets members of a website called Bull & Bear Capital watch his live trades and “copy the rogue if they dare”. A strategy like this is incredibly risky, with regulated trading platform Trade Nation noting: “Blindly following trading signals can be a recipe for disaster as these may easily be wrong, and if you’re passively copying instead of actively thinking, you’re not learning how to be a better trader”.

Belfort, on the other hand, will be sharing “his favorite market sector” as well as insights into what it takes to be a trader, how to take advantage of opportunities, and how to learn from mistakes. That said, while he won’t be offering concrete financial guidance, Belfort’s comments should still be taken with a pinch of salt and attendees should follow up his claims with their own research where necessary.

What has Jordan Belfort done since leaving prison?

Belfort was banned from the securities industry for life by New York Stock Exchange regulators in 1996. He hasn’t been able to associate with any brokers, dealers, investment companies or investment advisers. He now works as a coach and motivational speaker and operates his own company. According to The Hollywood Reporter, he charges up to to $100,000 a day for his speeches and seminars.

Belfort is also an author having published The Wolf of Wall Street in 2007, followed by another autobiographical book called Catching the Wolf of Wall Street. His most recent book, Way of the Wolf: Become a Master Closer with Straight Line Selling, also functions as a motivational work delving into some of his sales strategies. He also has his own podcast called The Wolf’s Den where he discusses “some of the craziest moments of his life” and interviews guests including celebrities, entrepreneurs and scientists.

Is RagingBull credible?

Belfort claims he decided to partner with RagingBull because “they're the only ones who are teaching trading with a real voice that you'd hear on the floor of Wall Street". Worryingly, the platform has been embroiled in almost as much controversy as the Wolf of Wall Street himself.

RagingBull, which is not overseen by financial regulators, has faced intense criticism over its aggressive marketing tactics which can mean customers receive dozens of promotional emails every day. According to the Financial Times, customers have also experienced long delays while waiting for refunds, and some have even been asked to sign non-disclosure agreements before they get their money back.

As a result, the US Better Business Bureau received 148 complaints about the company. RagingBull has insisted that many of the issues were due to insufficient staffing, with the company unprepared for the surge in amateur trading seen during the Covid-19 lockdown. “Covid took us by surprise," Jeff Bishop told the BBC. "We adjusted to this demand, hired 20 additional staff on the support team, and have since resolved almost all BBB complaints."

Belfort’s video series is an exclusive, free product available to RagingBull members. But any new traders considering signing up to the platform to access this content would be wise to thoroughly read up on the company before committing.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes