Broker helped break insider trading scandal
Worked undercover in bid for leniency after being implicated
Ivan F. Boesky, the flamboyant stock trader whose co-operation with the government cracked open one of the largest insider trading scandals on Wall Street, has died at the age of 87.
His daughter Marianne Boesky told the New York Times on Monday that he died in his sleep, and his wife confirmed Boesky’s death to the Washington Post. No cause of death was given.
The son of a Detroit delicatessen owner, Boesky was once considered one of the richest and most influential risk-takers on Wall Street. He had parlayed $700,000 (U.S.) from his late mother-in-law’s estate into a fortune estimated at more than $200 million, hurtling him into the ranks of Forbes magazine’s list of the 400 richest Americans.
But once implicated in insider trading, Boesky co-operated with a brash young U.S. attorney named Rudolph Giuliani in a bid for leniency, uncovering a scandal that shattered promising careers, blemished some of the most respected U.S. investment brokerages and injected a certain paranoia into the securities industry.
Working undercover, Boesky secretly taped three conversations with Michael Milken, the so-called “junk bond king” whose work with Drexel Burnham Lambert had revolutionized the credit markets. Milken eventually pleaded guilty to six felonies and served 22 months in prison, while Boesky paid a $100million fine and spent 20 months in a minimum-security California prison nicknamed “Club Fed” beginning in March 1988.
After Boesky’s arrest, accounts widely circulated that he had told business students during a commencement address at the University of California at Berkley in 1985 or 1986, “Greed is all right, by the way. I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself.”
The line was memorably echoed by Michael Douglas in Oliver Stone’s 1987 film “Wall Street.”
Boesky said he couldn’t remember that “greed is healthy” line.
Prosecutors said Boesky’s co-operation provided the government with the most information about securities law violations since the legislative hearings that led to the 1933 and ’34 Securities Acts.
Ivan Frederick Boesky was born in Detroit in 1937 into a family of Russian Jewish immigrants. Boesky said he learned industriousness from his father, who operated three delicatessens.
Boesky entered the Detroit College of Law in 1959, which then did not require an undergraduate degree for admission. He withdrew twice before receiving his degree five years later.
Prosecutors said Ivan Boesky’s co-operation provided the government with the most information about securities law violations since the legislative hearings that led to the 1933 and ’34 Securities Acts