Wolf of Wall Street author Jordan Belfort weighs in on legality of GameStop and AMC stock surge
‘If you could prove that they are actually colluding together, then that would be illegal,’ he said.
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Your support makes all the difference.The Wolf of Wall Street author Jordan Belfort has weighed in on the ongoing stock price surge of brands like GameStop and AMC, saying, “there is some sort of loose crime going on, but it's going to be a very tough one to prove, I think.”
In an interview with CNN Business, Belfort, who made a fortune in the 1990s as a New York City stockbroker with his firm but ultimately spent 22 months in prison for fraud and corruption, asserted that “if you could prove that they are actually colluding together, then that would be illegal.”
Belfort, whose 2007 memoir was adapted into a Martin Scorsese movie starring Leonardo DiCaprio in 2013, expressed caution around Redditors jumping in to buy stock in GameStop and AMC.
“The problem is, it is sort of this loose collision where one person says 'Let's stick together and stay strong.' And theoretically, that's illegal,” he said. “But I doubt that the [US Securities and Exchange Commission] would try to make a case out of something like that.”
Belfort also said that though the “average person” could stand to make a lot of money through the hot stocks, they could just as easily lose it. “It's truly a modified pump and dump because, at the end of the day, it will most certainly go back down because it's not trading on any rational, fundamental value,” he said.
“Just remember, every time the market goes up, GameStop goes up, it's going to be harder and harder to make that next move up because the market cap is just not sustainable,” he continued. “So, at a certain point, someone has to be crossing out the people who are selling and moving on to the next one.”
If anyone stands to lose anything, Belfort said, it would be lower-income buyers who caught on to the trend too late.
“The ones getting in at the end of the party ... there are going to be some massive victims in this, most certainly,” he said. "There is some sort of loose crime going on, but it's going to be a very tough one to prove, I think."
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