Ivan F. Boesky, the flamboyant stock trader who worked with the government to uncover one of Wall Street’s biggest insider trading scandals, has died at the age of 87.
His daughter Marianne Boesky said: monday new york times Boesky’s wife confirmed Boesky’s death to the Washington Post, saying he died in his sleep. His cause of death has not been disclosed.
Mr. Boesky, the son of a Detroit delicatessen owner, was once considered one of Wall Street’s richest and most influential risk-takers. He invested $700,000 from his late mother-in-law’s estate and amassed an estimated fortune of more than $200 million, earning him a spot on Forbes magazine’s list of America’s 400 richest people.
But once he was implicated in insider trading, Boesky teamed up with a brash young U.S. attorney named Rudolph Giuliani in a bid for clemency, destroying a promising career and becoming part of one of America’s most respected investment brokers. exposed a scandal that damaged the department and injected a certain paranoia into the securities industry. .
Working undercover, Boesky secretly recorded three conversations with Michael Milken, the so-called “junk bond king” whose work with Drexel Burnham Lambert revolutionized the credit markets. Milken ultimately pleaded guilty to six felonies and served a 22-month prison sentence, while Boesky paid a $100 million fine and began working in a minimum-security California facility known as “Club Fed” starting in March 1988. He served 20 months in prison.
After Mr. Boesky’s arrest, there was a widely circulated account of Mr. Boesky telling business students during a commencement address at the University of California, Berkeley in 1985 or 1986: I want you to know that. I think greed is healthy. You can be greedy and still be satisfied with yourself. ”
This line was memorably repeated by Michael Douglas in his Oscar-winning performance as Gordon Gekko in Oliver Stone’s 1987 film Wall Street.
“Ladies and gentlemen, the point is, for lack of a better word, being greedy is good,” Douglas told Teldar Paper shareholders. “Greed is right. Greed works. Greed defines, cuts through, and captures the essence of the evolutionary spirit.”
Mr. Boesky said he could not remember the line, “Greed is healthy,” and denied another quote attributed to him in the Atlantic Monthly in 1984. In it, Boesky said that climbing to the height of a huge pile of silver coins would be an “aphrodisiac experience.”
Although he typically worked 18-hour days, Boesky, who was silver-haired, thin, and not very tall, certainly lived a life of luxury. He wore designer clothes, traveled by limousine, private plane, and helicopter, and renovated his 10,000-square-foot mansion in Westchester County to resemble Monticello with a Jeffersonian dome.
Boesky said during the 1993 divorce proceedings, “there was a significant amount of material available.” She added, “We also had venues in Palm Beach, Paris, New York and the South of France.”
Boesky was an arbitrageur and risk-taker who made millions of dollars by betting on stocks that appeared to be takeover targets. But some of his tips came from within his M&A division at Drexel Burnham Lambert Inc. and his Kidder, Peabody & Co.
Drexel’s Dennis Levin and Kidder Peabody’s Martin Segal provided confidential information to Boesky in exchange for promised profit cuts of 1 percent or 5 percent.
Boesky paid Segal $700,000 in three installments, and a courier delivered a briefcase full of cash during three secret meetings on street corners and in the lobby of the Plaza Hotel. Boesky made millions of dollars from information from Segal that included information that Getty Oil and Carnation were ripe for acquisition.
Mr. Levine stumbled over his own insider trading and was arrested before he could get paid. Levine, who faces severe penalties under the government’s extortion laws, told the whole story. Mr. Boesky also sang, along with former stockbroker Boyd Jeffries, Mr. Siegel, four executives from Britain’s Guinness PLC, takeover strategist Paul Bilzerian, and stock speculator Salim Lewis. provided information that led to a conviction or guilty plea in a case.
The biggest fish was Milken, the pioneering financier who transformed capital markets in the 1970s with a new form of debt that made it possible for thousands of small and medium-sized businesses to raise capital.
In the 1980s, these “junk” bonds were used to finance thousands of leveraged buyouts, including Revlon, The Beatrice Companies, RJR Nabisco Inc., Federated Department Stores, and Milken, a Wall Street He became a hated and feared person.
The investor and philanthropist was charged with 98 counts including securities fraud, mail fraud, insider trading, extortion and false statements. Prosecutors said Mr. Milken and Mr. Boesky conspired to manipulate securities prices, manipulate trades and evade tax and regulatory requirements.
Mr. Milken ultimately pleaded guilty to six securities violations, including telling Mr. Boesky that he would cover losses he incurred from trading stock in Fischbach, the company he was acquiring at the time.
At his 1987 sentencing, Boesky’s lawyers cited a psychiatrist who said Boesky “suffered from an abnormal and compulsive need to prove himself, overcoming certain feelings of inadequacy and inferiority rooted in his childhood.” “I began to realize that I was struggling with the desire to do something.”
Three years after his release from a Brooklyn nursing home in April 1990, Boesky and his wife Seema divorced after 30 years of marriage.
Claiming to be left penniless after paying fines, restitution and legal fees, he won $20 million in cash and $180,000 a year in alimony from her $100 million estate. He also acquired a $2.5 million home in San Diego’s La Jolla neighborhood, where he lived with his boyhood friend, Hoshan Wekili.
Ivan Frederick Boesky was born in Detroit in 1937 to a family of Russian Jewish immigrants. Boesky said he learned hard work from his father, who owned three delicatessens. When Boesky was 13, he bought a 1937 Chevrolet truck, painted it white, and sold ice cream in a Detroit park, earning about $150 a week in nickels and dimes.
Mr. Boesky, who dropped out of college three times, entered Detroit Law School in 1959, when an undergraduate degree was not required for admission. He declined twice before receiving his degree five years later.
While attending law school, Boesky married Seema Silverstein, the daughter of Ben Silverstein, a real estate developer and owner of the Beverly Hills Hotel.
Unable to find a job at any of the big law firms in Detroit, Boesky moved to New York with his wife and the first of their four children in 1966 and bounced from job to job on Wall Street.
In 1975, Boesky struck out on his own and started a small brokerage firm that eventually became a stake in a large investment company group with over 100 employees. He put in grueling hours, gave self-promoting newspaper interviews, and wrote a book in 1985 titled “Merger Mania.”
He was also an active philanthropist, especially for Jewish causes, donating $20 million to the library of the Jewish Theological Seminary, which was later renamed.
