Stock trader played key role in insider trading scandal in ’80s
Ivan F. Boesky, the flamboyant stock trader whose cooperation with the government cracked open one of the largest insider trading scandals in the history of Wall Street, has died at the age of 87.
A representative at the Marianne Boesky Gallery, owned by Ivan Boesky’s daughter, confirmed his death. No other details were 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 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.
Once implicated in insider trading, Boesky cooperated 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 $100 million fine and spent 20 months in a minimum-security California prison nicknamed “Club Fed,” beginning in March 1988.
After Boesky’s arrest, accounts circulated widely that he had had told business students during a commencement address at the University of California at Berkeley 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 his Oscarwinning portrayal of Gordon Gekko, a high-flying trader, in Oliver Stone’s 1987 film “Wall Street.”
“The point is, ladies and gentlemen, that greed, for lack of a better word, is good,” Douglas tells the shareholders of Teldar Paper. “Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.”
Boesky, however, said he couldn’t remember saying “greed is healthy” and denied another quotation attributed to him in the 1984 Atlantic Monthly, in which he allegedly said that climbing to the height of a huge pile of silver dollars would be “an aphrodisiac experience.”
While he usually worked 18-hour days, the silver-haired and lean Boesky also lived a life of opulence. He wore designer clothes, traveled in limousines, private airplanes and helicopters and revamped his 10,000square-foot Westchester County mansion with a Jeffersonian dome to resemble Monticello.
“There was a very substantial amount of materiality available,” Boesky said during his 1993 divorce proceedings. “We had places in Palm Beach, Paris, New York, the south of France.”