The story of Stratton Oakmont, the infamous brokerage firm portrayed in the movie “The Wolf of Wall Street,” offers an excellent opportunity to teach students about financial history, ethics, and the importance of regulations. This article will explore how educators can use the case of Stratton Oakmont to engage students in these critical topics.
Establishing Context
To set the stage for discussing Stratton Oakmont with your students, provide them with a brief historical overview of the late 20th-century financial landscape. Discuss what led to the deregulation of financial markets in the 1980s and 1990s and highlight how these changes paved the way for firms like Stratton Oakmont to emerge.
Stratton Oakmont Overview
Next, outline the story of Stratton Oakmont, including its founding by Jordan Belfort and Danny Porush, its rapid growth fueled by aggressive sales tactics, and its eventual downfall due to fraudulent practices. Highlight some of the firm’s most notorious activities, such as stock manipulation and pumping-and-dumping schemes.
Ethical Considerations
With a clear understanding of the company’s history in place, engage your students in a discussion about the ethical considerations related to Stratton Oakmont’s business practices. Encourage them to consider whether or not the ends justified the means and ask them to articulate their own perspectives on what they would have done differently if they were running such a business.
Regulatory Lessons
Given that one of the main reasons Stratton Oakmont was able to thrive was due to lax regulations at the time, it is important for students to understand how these shortcomings were addressed following its downfall. Explain how new laws and regulations – including the Sarbanes-Oxley Act – were enacted in response to financial scandals like this. Encourage students to think critically about whether these measures are sufficient to prevent similar events from happening in the future.
Real-Life Consequences
One essential aspect of teaching the story of Stratton Oakmont is illustrating the real-life consequences of its actions. Discuss how thousands of people lost their savings and livelihoods as a result of the firm’s fraud, and how its leaders faced prison time, fines, and other penalties for their misdeeds.
Conclusion
By incorporating the case of Stratton Oakmont into your curriculum, you are given an opportunity to teach a compelling lesson about ethics, financial regulations, and human nature. By examining both the successes and failures of this notorious brokerage firm, students can learn valuable insights about personal responsibility and the importance of government oversight in protecting consumers from financial predators.
