Stratton Oakmont defrauded many shareholders leading to the arrest and incarceration of several executives, and the closing of the firm in 1996. Jordan Belfort founded Stratton Oakmont in 1989 with Danny Porush, and his half brother Brian Blake. Stratton Oakmont became the largest OTC firm in the country during the late 1980s and 1990s, responsible for the initial public offering of 35 companies, including Steve Madden Ltd. The firm did not have a product control function to verify prices of its positions and monitor trading activity. Stratton Oakmont participated in pump-and-dump schemes, a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme "dump" their overvalued shares, the price falls and investors lose their money. Stratton Oakmont would also try to maintain the price of a stock by refusing to accept or process orders to sell the stock. The firm was under near-constant scrutiny from the NASD from 1989 onward. Finally, in April 1996, the New York District Business Conduct Committee barred Stratton Oakmont from conducting principal retail transactions for a year. Stratton Oakmont appealed to the NASD National Business Conduct Committee. In December, the NBCC expelled Stratton Oakmont from the NASD, putting the firm out of business.