Ivan Boesky, convict in 1980s insider trading scandal, dies at 87
Send a link to a friend
May 21, 2024]
(Reuters) -Ivan Boesky, the financier who gave birth to
the "greed is good" mantra before going to prison in one of the biggest
Wall Street insider trading scandals of the 1980s, has died at the age
of 87, the New York Times reported on Monday.
Boesky, who partly inspired the Gordon Gekko character in the 1987 movie
"Wall Street," was considered a genius at risk arbitrage - the business
of speculating in takeover stocks, and his wealth was estimated at $280
million.
"I think greed is healthy. You can be greedy and still feel good about
yourself," he said in a commencement speech to the University of
California Berkeley business school in 1986.
Just a few months later, the man known on Wall Street as "Ivan the
Terrible" was indicted on the charges that would send him to disgrace,
near-bankruptcy and prison.
![](http://archives.lincolndailynews.com/2024/May/21/images/ads/current/peasley_sda_PROMGRAD_2024.png)
Boesky became a legend by committing vast sums to potential merger
deals, trying to take advantage of the small but predictable gains that
follow takeover rumors.
Often, the news that Boesky was investing in a company was enough to
prompt other speculators to enter the market, creating a self-fulfilling
rise in the stock's price.
All along, Boesky insisted he bought stocks only after formal takeover
bids were announced. But the Securities and Exchange Commission proved
he obtained tips from investment bankers about deals in the works and
used them illegally before they were released to the public.
He won leniency by cooperating in the government's investigation of
insider trading rings and reportedly taped conversations with his
business contacts.
"He has been reviled as a stool pigeon. He has become a leper in the
financial community," Leon Silverman, Boesky's lawyer, said at his
client's sentencing hearing.
Boesky testified against Michael Milken, the junk bond king whose
stunning rise and fall also epitomized the era. Boesky received a
relatively light sentence of 3-1/2 years in prison, a $100 million fine
and a lifetime ban from trading securities.
Ivan Frederick Boesky was born on March 6, 1937, and grew up in Detroit,
where his parents owned restaurants. He said later that at age 13 he
bought a truck and drove it without a license to the city's parks, where
he sold ice cream.
With a degree from the Detroit College of Law, he worked as a law clerk
to a U.S. District Court judge before joining the accounting firm Touche
Ross.
[to top of second column]
|
![](http://archives.lincolndailynews.com/2024/May/21/images/ads/current/debbiesfloral_lda_MEMORIALDAY_2024.png)
Boesky moved to Wall Street in 1966, joining L.F. Rothschild as a
securities analyst. In 1975, with $700,000 bankrolled by his wife's
family, he established his own firm specializing in risk arbitrage.
By 1981, the Ivan F. Boesky Corp had assets of more than $500
million. Boesky reputedly made more than $150 million in profits
from runs on CBS Inc, Gulf Oil Co and Conoco.
'I DON'T KNOW HOW TO REST'
Described as a "money-orientated monomaniac," Boesky himself said
his work was "a sickness I have in the face of which I am helpless."
"The machine doesn't like to stop," he said of his 20-hour work
days. "I don't know how not to work. I don't know how to rest."
Whether at parties or under the dentist's drill, the tall and
impeccably tailored Boesky talked only business.
In his vast, white-marble suite of offices on Manhattan's Fifth
Avenue, he punched buttons on a 300-line telephone console and
studied stock market figures on an array of video screens.
In 1985, he established himself as the dean of the arbitrage
business by writing a book entitled "Merger Mania." But a year
later, when he pleaded guilty to insider trading, his reputation
crumbled and "Merger Mania" was dropped by the publisher.
He served around two years at the "country club" prison at Lompoc,
California, with tennis courts, a golf course, gym and billiard
room. But rather than making millions, he earned $3 a day for work
such as carpentry.
After he left prison in 1990, Boesky kept a very low profile. He was
reported to have enrolled in rabbinical studies and became involved
in projects helping the homeless.
He lived at a luxury home overlooking the Pacific Ocean in La Jolla,
California which he received in a divorce settlement from his
ex-wife Seema, the daughter of a real estate magnate.
The death was confirmed to the New York Times by Boesky's daughter,
Marianne Boesky. She did not immediately respond to messages.
(Reporting by Niket Nishant in Bengaluru; Editing by Diane Craft,
Shailesh Kuber and Cynthia Osterman)
[© 2024 Thomson Reuters. All rights reserved.]This material
may not be published, broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
![](http://archives.lincolndailynews.com/2024/May/21/images/ads/current/moriearty_sda_PROMGRAD_2024.png) |