Ivan Boesky, the financier who epitomized the “greed is good” mantra before being imprisoned in one of the 1980s’ biggest insider trading scandals, has died at 87.
Known for his mastery in risk arbitrage, Boesky’s wealth was once estimated at $280 million. His career and actions partly inspired the Gordon Gekko character in the 1987 film “Wall Street.”
Rise and Public Persona
Boesky’s career reached its zenith in the mid-1980s. In a 1986 commencement speech at the University of California Berkeley business school, he famously declared, “I think greed is healthy.
You can be greedy and still feel good about yourself.” However, within months, he was indicted, leading to his fall from grace. Dubbed “Ivan the Terrible” on Wall Street, Boesky’s significant investments in potential mergers often triggered a self-fulfilling rise in stock prices, driven by other speculators following his lead.
Unraveling the Scandal
Despite his claims of only purchasing stocks after formal takeover announcements, the SEC discovered that Boesky had been obtaining insider information from investment bankers. This illegal activity led to his downfall. To reduce his sentence, Boesky cooperated with government investigations, reportedly recording conversations with business contacts.
His lawyer, Leon Silverman, commented on the consequences, stating, “He has been reviled as a stool pigeon. He has become a leper in the financial community.” Boesky’s testimony against Michael Milken, the notorious junk bond king, helped him receive a lighter sentence of three and a half years in prison, a $100 million fine, and a lifetime ban from trading securities.
An Ambitious Beginning
Ivan Frederick Boesky, born on March 6, 1937, in Detroit, grew up in a family that owned restaurants. Demonstrating his entrepreneurial spirit early, he bought a truck at age 13 to sell ice cream in city parks.
After earning a degree from the Detroit College of Law, he worked as a law clerk and later joined Touche Ross as an accountant. In 1966, Boesky transitioned to Wall Street as a securities analyst at L.F. Rothschild.
By 1975, with $700,000 from his wife’s family, he founded his own firm specializing in risk arbitrage. By 1981, the Ivan F. Boesky Corp had assets exceeding $500 million, and Boesky reportedly made over $150 million in profits from significant corporate runs.
Downfall and Later Life
Described as a “money-oriented monomaniac,” Boesky admitted his work was “a sickness I have in the face of which I am helpless.” Known for his relentless 20-hour workdays, he often discussed business even during social events.
In 1985, Boesky published “Merger Mania,” solidifying his status in the arbitrage business. However, after pleading guilty to insider trading in 1986, his career and reputation crumbled, and the book was dropped by its publisher.
Boesky served about two years at the minimum-security prison in Lompoc, California. Post-release in 1990, he maintained a low profile, reportedly studying rabbinical studies and engaging in projects for the homeless.
He lived in a luxury home in La Jolla, California, acquired in his divorce settlement with Seema, the daughter of a real estate magnate. His death was confirmed by his daughter, Marianne Boesky, who did not immediately respond to requests for further comments.
