The Wolf of Wall Street

CHAPTER 10

THE DEPRAVED CHINAMAN

By four p.m. it was one for the record books.

The trading day was over, and the news that Steve Madden Shoes had been the most actively traded stock in America and, for that matter, the world had come skidding across the Dow Jones wire service for one and all to see. The world! Such audacity! Such sheer audacity!

Oh, yes, Stratton Oakmont had the power, all right. In fact, Stratton Oakmont was the power, and I, as Stratton’s leader, was wired into that very power and sat atop its pinnacle. I felt it surge through my very innards and resonate with my heart and soul and liver and loins. With more than eight million shares changing hands, the units had closed just below $19, up five hundred percent on the day, making it the largest percentage gainer on the NASDAQ, the NYSE, the AMEX, as well as any other stock exchange in the world. Yes, the world—from the OBX exchange way up north in the frozen wasteland of Oslo, Norway, all the way down south to the ASX exchange in the kangaroo paradise of Sydney, Australia.

Right now I was standing in the boardroom, casually leaning against my office’s plate-glass window, with my arms folded beneath my chest. It was the pose of the mighty warrior after the fray. The mighty roar of the boardroom was still going strong, but the tone was different now. It was less urgent, more subdued.

It was almost celebration time. I stuck my right hand in my pants pocket and did a quick check to make sure my six Ludes hadn’t fallen out or simply vanished into thin air. Quaaludes had a way of vanishing sometimes, although it usually had more to do with your “friends” snatching them from you—or you getting so stoned that you took them yourself and simply didn’t remember. That was the fourth phase of a Quaalude high and, perhaps, the most dangerous: the amnesia phase. The first phase was the tingle phase, next came the slur phase, then the drool phase, and then, of course, the amnesia phase.

Anyway, the drug-god had been kind to me, and the Quaaludes hadn’t vanished. I took a moment to roll them around in my fingertips, which gave me an irrational sense of joy. Then I began the process of calculating the appropriate time to take them, which was somewhere around 4:30 p.m., I figured, twenty-five minutes from now. That would give me fifteen minutes to hold the afternoon meeting, as well as enough time to supervise this afternoon’s act of depravity, which was a female head-shaving.

One of the young sales assistants, who was strapped for cash, had agreed to put on a Brazilian bikini and sit down on a wooden stool at the front of the boardroom and let us shave her head down to the skull. She had a great mane of shimmering blond hair and a wonderful set of breasts, which had recently been augmented to a D cup. Her reward would be $10,000 in cash, which she would use to pay for her breast job, which she’d just financed at twelve percent. So it was a win-win situation for everyone: In six months she’d have her hair back, and she’d own her D cups debt free.

I couldn’t help but wonder if I should’ve allowed Danny to bring a midget into the office. After all, what was so wrong with it? It sounded a bit off at first, but now that I’d had a little time to digest it, it didn’t seem so bad.

In essence, what it really boiled down to was that the right to pick up a midget and toss him around was just another currency due any mighty warrior, a spoil of war, so to speak. How else was a man to measure his success if not by playing out every one of his adolescent fantasies, regardless of how bizarre it might be? There was definitely something to be said for that. If precocious success brought about questionable forms of behavior, then the prudent young man should enter each unseemly act into the debit column on his own moral balance sheet and then offset it at some future point with an act of kindness or generosity (a moral credit, so to speak), when he became older and wiser and more sedate.

Yet, on the other hand, we might just be depraved maniacs—a self-contained society that had spiraled completely out of control. We Strattonites thrived on acts of depravity. We counted on them, in fact; I mean, we needed them to survive!

It was for this very reason that, after becoming completely desensitized to basic acts of depravity, the powers that be (namely, me) felt compelled to form an unofficial team of Strattonites—with Danny Porush as its proud leader—to fill the void. The team acted like a twisted version of the Knights Templar—whose never-ending quest to find the Holy Grail was the stuff of legend. But unlike the Knights Templar, the Stratton knights spent their time scouring the four corners of the earth for increasingly depraved acts, so the rest of the Strattonites could continue to get off. It wasn’t like we were heroin junkies or anything as tawdry as that; we were unadulterated adrenaline junkies, who needed higher and higher cliffs to dive off and shallower and shallower pools to land in.

The process had officially gotten under way in October 1989, when twenty-one-year-old Peter Galletta, one of the initial eight Strattonites, christened the building’s glass elevator with a quick blow job and an even quicker rear entry into the luscious loins of a seventeen-year-old sales assistant. She was Stratton’s first sales assistant, and, for better or worse, she was blond, beautiful, and wildly promiscuous.

At first I was shocked and had even considered firing Peter, for dipping his pen into the company inkwell. But within a week the young girl had proven to be a real team player—blowing all eight Strattonites, most of them in the glass elevator, and me under my desk. And she had a strange way of doing it, which became legendary among Strattonites. We called it the twist and jerk—where she’d use both hands at once, while she transformed her tongue into a whirling dervish. Anyway, about a month later, after a tiny bit of urging, Danny convinced me that it would be good if we both did her at the same time, which we did, on a Saturday afternoon while our wives were out shopping for Christmas dresses. Ironically, three years later, after bedding God only knew how many Strattonites, she finally married one. He was one of the original eight Strattonites and had seen her ply her trade countless times. But he didn’t care. Perhaps it was the twist and jerk that had got him! Whatever the case, he’d been only sixteen when he first came to work for me. He dropped out of high school to become a Strattonite—to live the Life. But after a short marriage, he became depressed and committed suicide. It would be Stratton’s first but not last suicide.

That aside, within the four walls of the boardroom, behavior of the normal sort was considered to be in bad taste, as if you were some sort of killjoy or something, looking to spoil the fun for everyone else. In a way, though, wasn’t the concept of depravity relative? The Romans hadn’t considered themselves to be depraved maniacs, had they? In fact, I’d be willing to bet that it all seemed normal to them as they watched their less-favored slaves being fed to the lions and their more-favored slaves fed them grapes.

Just then I saw the Blockhead walking toward me with his mouth open, his eyebrows high on his forehead, and his chin tilted slightly up. It was the eager expression of a man who’d been waiting half his life to ask a single question. Given the fact that it was the Blockhead, I had no doubt the question was either grossly stupid or grossly worthless. Whichever it was, I acknowledged him with a tilt of my own chin, and then I took a moment to regard him. In spite of having the squarest head on Long Island, he was actually good-looking. He had the soft round features of a little boy and was blessed with a reasonably good physique. He was of medium height and medium weight, which was surprising, considering from whose loins he’d emerged.

The Blockhead’s mother, Gladys Greene, was a big woman.

Everywhere.

Starting from the very top of her crown, where a beehive of pineapple blond hair rose up a good six inches above her broad Jewish skull, and all the way down to the thick callused balls of her size-twelve feet, Gladys Greene was big. She had a neck like a California redwood and the shoulders of an NFL linebacker. And her gut…well, it was big, all right, but it didn’t have an ounce of fat on it. It was the sort of gut you would normally find on a Russian power-lifter. And her hands were the size of meat hooks.

The last time a person really got under Gladys’s skin was while she was going through the checkout line at Grand Union. One of those typical Long Island Jewish women, with a big nose and the nasty habit of sticking it where it didn’t belong, made the sorry mistake of informing Gladys that she had exceeded the maximum number of items to pass through the express lane and still maintain the moral high ground. Gladys’s response was to turn on the woman and hit her full on with a right cross. With the woman still unconscious, Gladys calmly paid for her groceries and made a swift exit, her pulse never exceeding seventy-two.

So there was no leap of logic required to figure out why the Blockhead was only a smidgen saner than Danny. Yet, in the Blockhead’s defense, he had had a lot on his plate growing up. His father, who died of cancer when Kenny was only twelve years old, had owned a cigarette distributorship, and, unbeknownst to Gladys, it had been grossly mismanaged—owing hundreds of thousands in back taxes. And just like that, Gladys found herself in a desperate situation: a single mother on the brink of financial ruin.

What was Gladys to do? Fold up her tent? Apply for welfare, perhaps? Oh, no, not a chance! Using her strong maternal instincts, she recruited Kenny into the seedy underbelly of the cigarette-smuggling business—teaching him the little-known art of repackaging cartons of Marlboros and Lucky Strikes and then smuggling them from New York into New Jersey with counterfeit tax stamps, where they could pick up the difference in the spread. As luck would have it, the plan worked like a charm, and the family stayed afloat.

But that was only the beginning. When Kenny turned fifteen, his mother realized that he and his friends had started smoking a different type of cigarette, namely, joints. Had Gladys gotten pissed? Not in the least! Without a moment’s hesitation, she backed the budding Blockhead as a pot dealer—providing him with finance, encouragement, a safe haven to ply his trade, and, of course, protection, which was her specialty.

Oh, yes, Kenny’s friends were well aware of what Gladys Greene was capable of. They had heard the stories. But it never came down to violence. I mean, what sixteen-year-old kid wants a two-hundred-fifteen-pound Jewish mama showing up at their parents’ doorstep to collect a drug debt—especially when she’s sure to be wearing a purple polyester pantsuit, size-twelve purple pumps, and a pair of pink acrylic glasses with lenses the size of hubcaps?

But Gladys was only getting warmed up. After all, you could love pot or hate pot, but you had to respect it as the most reliable gateway drug in the marketplace, especially when it came to teenagers. In light of that, it wasn’t long before Kenny and Gladys realized there were other economic voids to be filled in Long Island’s teenage drug market. Oh, yes, that Bolivian marching powder, cocaine, offered too high a profit margin for ardent capitalists like Gladys and the Blockhead to resist. This time, though, they brought in a third partner, the Blockhead’s childhood friend Victor Wang.

Victor was an interesting sort, insofar as him being the biggest Chinaman to ever walk the planet. He had a head the size of a giant panda’s, slits for eyes, and a chest as broad as the Great Wall itself. In fact, the guy was a dead ringer for Oddjob, the hitman from the James Bond movie Goldfinger, who could knock your block off with a steel-rimmed bowler cap at two hundred paces.

Victor was Chinese by birth and Jewish by injection, having been raised amid the most savage young Jews anywhere on Long Island: the towns of Jericho and Syosset. It was from out of the very marrow of these two upper-middle-class Jewish ghettos that the bulk of my first hundred Strattonites had come, most of them former drug clients of Kenny’s and Victor’s.

And like the rest of Long Island’s educationally challenged dream-seekers, Victor had also fallen into my employ, albeit not at Stratton Oakmont. Instead, he was the CEO of the public company Judicate, which was one of my satellite ventures. Judicate’s offices were downstairs on the basement level, a mere stone’s throw away from the happy hit squad of NASDAQ hookers. Its business was Alternative Dispute Resolution, or ADR, which was a fancy phrase for using retired judges to arbitrate civil disputes between insurance companies and plaintiffs’ attorneys.

The company was barely breaking even now—proving to be yet another classic example of a business looking terrific on paper but not translating into the real world. Wall Street was chock-full of these kinds of concept companies. Sadly enough, a man in my line of work—namely, small-cap venture capital—seemed to be finding all of them.

Nevertheless, Judicate’s slow demise had become a real sore point with Victor, despite the fact that it wasn’t really his fault. The business was fundamentally flawed and no one could’ve made a success of it, or at least not much of one. But Victor was a Chinaman, and like most of his brethren, if he had a choice between losing face or cutting off his own balls and eating them, he would gladly take out a scissor and start snipping at his scrotal sac. But that wasn’t an option here. Victor had, indeed, lost face, and he was a problem that needed to be dealt with. And with the Blockhead constantly pleading Victor’s case, it had become a perpetual thorn in my side.

It was for this very reason that I wasn’t the least bit surprised when the first words out of the Blockhead’s mouth were, “Can we sit down with Victor later today and try to work things out?”

Feigning ignorance, I replied, “Work what out, Kenny?”

“Come on,” he urged. “We need to talk with Victor about opening up his own firm. He wants your blessing and he’s driving me crazy about it!”

“He wants my blessing or my money? Which one?”

“He wants both,” said the Blockhead. As an afterthought, he added, “He needs both.”

“Uh-huh,” I replied, in the tone of the unimpressed. “And if I don’t give it to him?”

The Blockhead let out a great blockheaded sigh. “What do you have against Victor? He’s already pledged his loyalty to you a thousand times over. And he’ll do it again—right now—in front of all three of us. I’m telling you—next to you, Victor’s the sharpest guy I know. We’ll make a fortune off him. I swear! He’s already found a broker dealer he could buy for next to nothing. It’s called Duke Securities. I think you should give him the money. All he needs is half a million—that’s it.”

I shook my head in disgust. “Save your pleas for when you really need them, Kenny. Anyway, now is not the time to be discussing the future of Duke Securities. I think this is slightly more important, don’t you?” I motioned to the front of the boardroom, where a bunch of sales assistants were setting up a mock barbershop.

Kenny cocked his head to the side and looked over at the barbershop with a confused look on his face, but he said nothing.

I took a deep breath and let it out slowly. “Listen, there are things about Victor that trouble me. And that shouldn’t be news to you—unless, of course, you’ve had your head up your ass for the last five years!” I started chuckling. “You don’t seem to get it, Kenny, you really don’t. You don’t see that with all Victor’s plotting and planning he’s gonna Sun Tzu himself to death. And all his face-saving bullshit—I haven’t got the time or inclination to deal with it. I swear to fucking God!

“Anyway, get this through your head: Victor—will—never—be—loyal. Ever! Not to you, not to me, and not to himself. He’ll cut off his own Chinese nose to spite his own Chinese face in the name of winning some imaginary war he’s fighting against no one but himself. You got it?” I smiled cynically.

I paused and softened my tone. “Anyway, listen for a second: You know how much I love you, Kenny. And you also know how much I respect you.” I fought the urge to chuckle with those last few words. “And because of those two things, I will sit down with Victor and try to placate him. But I’m not doing it because of Victor fucking Wang, who I detest. I’m doing it because of Kenny Greene, who I love. On a separate note, he can’t just walk away from Judicate. Not yet, at least. I’m counting on you to make sure he stays until I do what I need to do.”

The Blockhead nodded. “No problem,” he said happily. “Victor listens to me. I mean, if you only knew how…”

The Blockhead started spewing out blockheaded nonsense, but I immediately tuned out. In fact, by the look in his eyes, I knew he hadn’t grasped my meaning at all. In point of fact—it was I, not Victor, who had the most to lose if Judicate went belly up. I was the largest shareholder, owning a bit more than three million shares, while Victor held only stock options, which were worthless at the current stock price of two dollars. Still, as an owner of stock, my stake was worth $6 million—although the two-dollar share price was misleading. After all the company was performing so poorly that you couldn’t actually sell the stock without driving the price down into the pennies.

Unless, of course, you had an army of Strattonites.

Yet there was one hitch to this exit strategy—namely, that my stock wasn’t eligible for sale yet. I had bought my shares directly from Judicate under SEC Rule 144, which meant there was a two-year holding period before I could legally resell it. I was only one month shy of the two-year mark, so all I needed was Victor to keep things afloat a tiny bit longer. But this seemingly simple task was proving to be far more difficult than I’d anticipated. The company was bleeding cash like a hemophiliac in a rosebush.

In fact, now that Victor’s options were worthless, his sole compensation was a salary of $100,000 a year, which was a paltry sum compared to what his peers were making upstairs. And unlike the Blockhead, Victor was no fool; he was keenly aware that I would use the power of the boardroom to sell my shares as soon as they became eligible, and he was also aware that he could get left behind after they were sold—reduced to nothing more than the chairman of a worthless public company.

He had intimated this concern to me via the Blockhead, who he’d been using as a puppet since junior high school. And I had explained to Victor, more than once, that I had no intention of leaving him behind, that I would make him whole no matter what—even if it meant making him money as my rathole.

But the Depraved Chinaman couldn’t be convinced of that, not for more than a few hours at a time. It was as if my words went in one ear and out the other. The simple fact was that he was a paranoid son of a bitch. He had grown up an oversize Chinaman amid a ferocious tribe of savage Jews. In consequence, he suffered from a massive inferiority complex. He now resented all savage Jews, especially me, the most savage Jew of all. To date, I had outsmarted him, outwitted him, and outmaneuvered him.

It was out of his very ego, in fact, that Victor hadn’t become a Strattonite in the early days. So he went to Judicate instead. It was his way of breaking into the inner circle, a way to save face for not making the right decision back in 1988, when the rest of his friends had sworn loyalty to me and had become the first Strattonites. In Victor’s mind, Judicate was merely a way station to insinuate himself back into the queue, so that one day I would tap him on the shoulder and say, “Vic, I want you to open up your own brokerage firm, and here’s the money and expertise to do it.”

It was what every Strattonite dreamed of and something I touched upon in all my meetings—that if you continued to work hard and stay loyal, one day I’d tap you on the shoulder and set you up in business.

And then you would get truly rich.

I had done this twice so far: once with Alan Lipsky, my oldest and most trusted friend, who now owned Monroe Parker Securities; and a second time, with Elliot Loewenstern, another long-time friend, who now owned Biltmore Securities. Elliot had been my partner back in my ice-hustling days. During the summer, the two of us would go down to the local beach and hustle Italian ices blanket-to-blanket, and make a fortune. We would scream out our sales pitch as we carried around forty-pound Styrofoam coolers, running from the cops when they chased after us. And while our friends were either goofing off or working menial jobs for $3.50 an hour, we were earning $400 a day. Each summer we would each save twenty thousand dollars and use it during the winter months to pay our way through college.

In any event, both firms—Biltmore and Monroe Parker—were doing phenomenally well, earning tens of millions a year, and they were each paying me a hidden royalty of $5 million a year just for setting them up.

It was a hefty sum, $5 million, and in truth it had little to do with setting them up. In point of fact, they paid me out of loyalty, and out of respect. And at the very crux of it, what held it all together was the fact that they still considered themselves Strattonites. And I considered them such too.

So there it was. As the Blockhead stood in front of me, still rambling on about how loyal the Chinaman would be, I knew otherwise. How could someone who harbored a deep-seated resentment toward all savage Jews ever stay loyal to the Wolf of Wall Street? He was a man of grudges, Victor, a man who held every last Strattonite in contempt.

It was clear: There was no logical reason to back the Depraved Chinaman, which led to another problem—namely, that there was no way to stop him. All I could do was delay him. And if I delayed too long, I ran the risk of him doing it without me—without my blessing, so to speak, which would set a dangerous precedent to the rest of the Strattonites, especially if he succeeded.

It was sad and ironic, I thought, how my power was nothing more than an illusion, how it would vanish quickly if I didn’t think ten steps ahead. I had no choice but to torture myself over every decision, to read infinite detail into everyone’s motives. I felt like a twisted game theorist, who spent the better part of his day lost in thought—considering all the moves and countermoves and outcomes thereof. It was emotionally taxing, my life, and after five long years it seemed to be getting the best of me. In fact, the only time my mind was quiet now was when I was either high as a kite or inside the luscious loins of the luscious Duchess.

Nevertheless, the Depraved Chinaman couldn’t be ignored. To start a brokerage firm required a minuscule amount of capital, perhaps half a million at most, which was peanuts compared to what he’d make in the first few months alone. The Blockhead himself could finance the Chinaman, if he so desired, although that would be an overt act of war—if I could ever prove it, which would be difficult.

In reality, the only thing holding Victor back was his lack of confidence—or his simple unwillingness to put his enormous Chinese ego and his tiny Chinese balls on the line. He wanted assurances, the Chinaman; he wanted direction, and emotional support, and protection against short-sellers—and, most importantly, he wanted large blocks of Stratton new issues, which were Wall Street’s hottest.

He would want all these things until he could figure them out on his own.

Then he would want no more.

That would take six months, I figured, at which point he would turn on me. He would sell back all the stock I’d given him, which would put unnecessary pressure on the Strattonites, who would be forced to buy it. Ultimately, his selling would drive the stocks down, which would lead to customer complaints and, most importantly, a boardroom full of unhappy Strattonites. He would then prey upon that unhappiness—using it to try to steal my Strattonites. He would accompany it with a false promise of a better life at Duke Securities. Yes, I thought, there was something to be said for being small and nimble, as he would be. It would be difficult to defend against such an attack. I was the lumbering giant, vulnerable at the periphery.

So the answer was to deal with the Chinaman from a position of strength. I was big, all right, and despite being vulnerable at the periphery I was tough as nails at the center. So it would be from the very center that I’d strike. I would agree to back Victor, and I would lull him into a false sense of security, then, when he least expected it, I would unleash a first strike against him of such ferocity that it would leave him destitute.

First thing first: I would ask the Chinaman to wait three months to give me enough time to unload my Judicate shares. The Chinaman would understand that and suspect nothing. Meanwhile, I would approach the Blockhead and squeeze some concessions out of him. After all, as a twenty percent partner of Stratton, he stood in the way of other Strattonites who wanted a piece of the pie.

And once I put Victor into business, I would bring him to the point where he was making decent money but not too much money. I would then advise him to trade in such a manner that would leave him subtly exposed. And there were ways to do that that only the most sophisticated traders would pick up on, ways that Victor certainly would not. I would play right into that giant Chinese ego of his—advising him to maintain large positions in his proprietary trading account. And when he least expected it, when he was at his most vulnerable point, I would turn on him with all my power and attack. I would drive the Depraved Chinaman right the fuck out of business. I would sell stock through names and places that Victor never heard of, names that could never be traced back to me, names that would leave him scratching his panda-size head. I would unleash a barrage of selling that was so fast and so furious that, before he knew what even hit him, he would be out of business—and out of my hair forever.

Of course, the Blockhead would lose some money in the process, but at the end of the day he would still be a wealthy man. I would chalk that one up to collateral damage.

I smiled at the Blockhead. “Like I said, I’ll meet with Victor out of respect to you. But I can’t do it until next week. So let’s do it in Atlantic City, when we settle up with our ratholes. I assume Victor’s going, right?”

The Blockhead nodded. “He’ll be anywhere you want him to be.”

I nodded. “Between now and then you better straighten the Chinaman’s head out. I’m not gonna be pressured into doing this before I’m good and ready. And that won’t be until after I’ve blown out of Judicate. You got it?”

He nodded proudly. “As long as he knows you’ll back him, he’ll wait as long as you want.”

As long as? What a fool the Blockhead was! Was it just my imagination or had he proved yet again how clueless he was? By uttering those very words, he confirmed what I’d already known—that the Depraved Chinaman’s allegiance was subject to.

Yes, today the Blockhead was loyal; he was still Stratton through and through. But no man can serve two masters for long, and certainly not forever. And that was what the Depraved Chinaman was: another Master. He was waiting in the wings, manipulating the Blockhead’s feeble mind as he sowed seeds of dissension within my very ranks, starting with my own junior partner.

There was a war brewing here. It was looming just over the horizon—heading for my doorstep in the not-too-distant future. And it was a war I would win.