One of Wall Street’s most notorious scam artists has been warning investors that a popular new investment is “the biggest scam ever.”
Whether or not the advice is sound is virtually irrelevant. Why are investors taking advice from convicted Wall Street con artist Jordan Belfort?
Belfort earned the nickname the “Wolf of Wall Street” by making millions of dollars throughout the 1990s via his investment firm Stratton Oakmont. In 1996 he was banned from the securities industry for life by New York Stock Exchange regulators. “With this expulsion, NASD Regulation has rid the securities industry of one of its worst actions,” NASD Regulation President Mary Schapiro said at the time.
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Belfort’s crimes were documented in the 2013 movie “The Wolf of Wall Street,” with Leonardo DiCaprio famously in the lead role.
Belfort has been making the rounds to reporters to promote his new book, “The Way of the Wolf.” He was recently interviewed by Financial Times, in which he warned investors that initial coin offerings (ICOs) are a “massive scam.”
“It is the biggest scam ever, such a huge gigantic scam that’s going to blow up in so many people’s faces,” he says. “It’s far worse than anything I was ever doing.”
Digital currencies such as bitcoin and ethereum have gotten a lot of attention among investors as an alternative to government-backed currencies. While a handful of cryptocurrencies have gotten most of the media attention, there are currently more than 1,000 different digital currencies around the world, according to CoinMarketCap.
New cryptocurrencies often use ICOs to raise money.
Belfort pleaded guilty in 1999 to fraud and other crimes related to penny stock scams, money laundering and market manipulation and was sentenced to four years in prison.
[See: 8 Things to Consider When Choosing an Online Broker.]
Rather than rely on the word of a convicted scam artist like Belfort, investors should instead consider the opinions of more reputable sources. Berkshire Hathaway Inc. ( BRK.A, BRK.B) CEO Warren Buffett, JPMorgan Chase & Co. ( JPM) CEO Jamie Dimon and Nobel Prize-winning economist Robert Shiller are just three of the dozens of distinguished Wall Street voices who have commented on cryptocurrency as an investment in recent months.
Perhaps some investors believe scam artists like Belfort are the quickest to recognize other scams. However, the last group of people to put money behind Belfort’s ideas lost millions of dollars, most of which hasn’t been returned more than two decades later.
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Why Are We Still Listening to Jordan Belfort? originally appeared on usnews.com
