What Really Happened to `The Wolf on Wall Street?'

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Dec. 24(Bloomberg) –- Kirkland & Ellis Partner Jonathan Henes discusses his role in winding down Stratton Oakmont, the company founded by "The Wolf of Wall Street" Jordan Belfort. Henes speaks on Bloomberg Television's "Market Makers." (Source: Bloomberg)

This is clearly an extraordinary story.

How does this happen?

You don't see this at goldman sachs are jpmorgan.

What was so unique about this firm and this character question mark it was agreed.

What they did is they went out i got these young kids from long island who congregated in the trading room and said go sell.

You have these young kids who went out and would tell stories to old people and fleece them of their iras and tell them stories like you have to buy right now because warned buffett's going to buy.

If you don't get in before he does, the stock is going to pop and you will make all us money.

It was just greed and they were driving around at 22 years old with their porsches and having apartments in the city.

Where were the regulators?

Why is everybody 24 in driving a ferrari question are the regulators were there.

They came in pretty early and put tapes in place.

All of phone calls by the time we got involved had been taped and that's how we found out and put the pieces together.

They were still selling and lying to sell and knew they were being taped.

It was not a secret.

They knew they were being taped.

Is there an argument to be made at these schools didn't realize what they were doing?

I think they just got -- i think they just got caught up in them.

The young kids and we were going to sell the stock and we're being told this is a stock we should be selling, so how do we do it?

I don't think they were thinking we are hurting people.

We took depositions of them and we say to these kids what were you thinking question mark what were they thinking?

They wanted to be rich.

They said we were just trying to sell.

You don't need to tell the truth, you just need to sell it.

We are not really hurting people.

That's how they felt and they just got caught up in the excess and money, living the life.

It was just all about the commissions.

He had to know this party was going to end at some point or was he blinded by sex, drugs and rock 'n roll?

I think what happens is people start off kind of small and say we're going to get into something and take a chance and step over the line and then they keep going.

At some point, you can't turn back.

I'm not sure if he thought he was going to get caught, i think he was caught up in the sex and drugs and rock 'n roll in living the high life.

If you think about it, it was a very small community in long island.

I know so many friends who grew up in that area and said my father worked there or my brother were there because they were all getting these jobs right out of school.

I think they just got caught up in all of the greed.

How do we know this isn't going to happen again?

If you went to a nightclub in new york city tonight, who is paying for these tables, it's traders on the street.

You have lots of different types of companies.

Most rogue rich firms are on the up and up, trying to sell stocks, they are pushing and selling but they are selling real stocks.

These were not real stocks.

There was a stock that was supposed to be a great new company that would help obese children lose weight.

It turned out there was a warehouse in new jersey with an exercise bike and it didn't mean anything.

But they sold the stock and pumped it up and let it go and drop down to zero.

How does this liquidation work?

Did you have any interaction with jordan?

We did not.

We deposed his partner twice and we had all the other brokers but we never saw jordan.

I'm not sure where he was.

Maybe he was already in jail.

What was danny's story?

They were in it together.

I think jordan was more flamboyant, but when danny walked in for the deposition, he was very tough.

He would not talk to us.

We were trying to get wings out of him and unfortunately, he was in jail and he was a totally different guy.

Was he a totally different guy or was he a totally caught guy?

Caught and it probably caught up with him.

He probably realized what he did and he would from a guy who was flying high to a guy who is as low as he can be.

You have to look into the mirror at some point.

When the firm shattered, how did the liquidation work?

A couple of things happened.

We had to put the story together, so he listens to the tapes?

How exciting was listening to the tapes?

We found out the customers were lying to your aid they would file claims and say we told him to sell the stock on this day.

They didn't sell it and we should have a claim.

We would go back to the tapes that not only did they say don't sell it, they said by more.

You heard all of these tapes, people on both sides lie.

So we put the whole story together and tried to track down the money and it's not easy to track down the money when it's going all over the world.

Then it was a matter of how do we get these customers back

This text has been automatically generated. It may not be 100% accurate.

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