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Failure is the secret of success
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Failure is the secret of success

knowledge world

January 03 , 9:26:38

success and failure
Dubai - Maya Juridini
The movie "The Wolf of Wall Street" brought back to the fore the crooked ways that some major investors might take to reap huge profits, as happened before the global financial crisis in the case of mortgages.

The film was based on the memoirs of Jordan Belfort, who made a huge fortune that came in particular through what is known as the "Boiler Room". What is this method of investment that the financial authorities warn of?

"The Wolf of Wall Street" won the Golden Globe Award for its star Leonardo Di Caprio as the best actor in a comedy, and created controversy around the world as a result of the topics it covered, which included corruption and the illegal luxury life.

The film tells the story of Jordan Belfort based on his true memoirs, a financial broker on Wall Street who lost his job after bleeding the markets on Black Monday of the year one thousand nine hundred and eighty-seven, which led him to work in a company classified as a boiler room, and then to establish his own company.

The film dealt with the phenomenon of the boiler room, which the financial authorities warn about until today, but what does that mean?

The term BOILER ROOM and its literal translation refers to unlicensed and unregistered offices in which brokers intensively contact clients with the aim of persuading them to invest in cheap stocks, claiming to secure very high returns with promises that the risks are almost non-existent. The broker relies on corrupt and illegal methods to convince clients, and demands a quick response, threatening hesitant clients that they are wasting the opportunity of a lifetime.

There is usually a relationship between the managers of the boiler room and the owners of the companies whose shares they are trying to sell, so that the shares are sold to a group of investors and then obliged to keep them, especially since there is no real market for these shares. After that, these shares are promoted via telephone or e-mail through the boiler room, which generates demand for them and allows the owners of the company to sell their shares for high profits.

The North American Securities Administrators Association estimates that investors lose $10 billion annually to corrupt investment operations over the phone, which translates to $1 million an hour.