Undictated
The wolves don’t just roam Wall Street – they also hunt in SA – Daily Newsletter
Hi there,
We finally got to watch The Wolf of Wall Street on Saturday, some weeks later than expected. The subject, Jordan Belfort, was in Johannesburg last month. I'd been asked to interview him for CNBC Africa but for some reason it fell through. With hindsight, that was just as well. Belfort is the kind of interviewee you need to be really well prepared for. And at that stage I hadn't seen the movie nor read his autobiography.
The Martin Scorsese movie is realistic, perhaps overly so for the faint hearted. Laced with nudity, sex and drug abuse, perseverance is required to get through its three hours. But it does hammer home some uncomfortable truths about the dark side of financial services. Reminding us that the more opaque the opportunity, the greater the cut being grabbed by middle men. Like Belfort and his infamous Stratton Oakmont gang who generated 50% commission by selling shares in companies listed on the infamous Pink Sheets – rubbish "investments" designed with the sole intention of enriching promoters and those doing the selling.
Financial wolves roam well beyond Wall Street. Over the years, South Africa has provided them rich pickings. From Masterbond and Fidentia through to Sharemax, high commissions provide the incentive for some to push dodgy "investments" onto ignorant clients. Laws have been tightened, but such finer points have never deterred wolves. And never will. Apart from Leonardo di Caprio's superb acting, the lasting memory from the movie is a warning – if something looks too good to be true, it is. Be sure to ask those uncomfortable questions up-front like 'Why me? What are you being paid? Why isn't the company listed?' And listen carefully to the response. Sometimes it's your only protection against a river of tears.
Best
Alec
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