THE WOLF OF WALL STREETS

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ETHICS

Explain the contexts of the violations, and why they are violations.

Violation number 1

Loyalty prudence & Care

The general guidance: Client interests come first. M&Cs must act in their clients’ best interests and
recommend products that are suitable given their investment objectives and risk tolerances.

Belfort claimed he was selling "junk" to a "garbage man." In order to sell as much stock as possible, he
exaggerated the stock's benefits while downplaying the risks. He also targeted people who were low-
income, uneducated, or otherwise disadvantaged. Although his action was legal, it was immoral because
he knew these kind of stocks would collapse rapidly, yet he never sought informed consent from his
clients or considered their best interests. Investing would be damaged, and many people would suffer as
a result of his shady behavior.

Violation Number 2

Material nonpublic information.

General guidance : Do not use “material” “nonpublic” information in any investment related activities

Market manipulation.
General guidance: No intention to manipulate price or volume

He manipulated the stock market by aiding companies with their initial public offers (IPOs) while
secretly purchasing stock to maximize his profits. Insider trading was forbidden because it violated the
Securities Exchange Act by assuming the legal obligations of shareholders and removing their interests.

Violation Number 3

Misconduct:
General guidance: No intention to manipulate price or volume M&Cs must not engage in any
professional conduct involving dishonesty, fraud, or deceit or commit any act that reflects adversely on
their professional reputation, integrity, or competence.

Jordan hides his money by opening a Swiss bank account in the name of Naomi's Aunt Emma, who is a
British national and so out of reach of American authorities, with dishonest banker Jean-Jacques Saurel.
He smuggles the money into Switzerland with the help of his friend BradBodnick's wife and in-laws,
who have European passports.