Ivan Boesky

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Ivan Boesky
Born
Ivan Frederick Boesky

(1937-03-06)March 6, 1937
Detroit, Michigan, U.S.
DiedMay 20, 2024(2024-05-20) (aged 87)
La Jolla, California, U.S.
Alma materMichigan State University
Occupation(s)Stock trader and convicted felon
Known forInsider trading scandal
Spouse(s)
Seema Silberstein
​
​
(m. 1962; div. 1991)​

Ana Boesky
Children5

Ivan Frederick Boesky (March 6, 1937 – May 20, 2024) was an American stock trader known for his prominent role in an insider trading scandal in the mid-1980s.[1] He pleaded guilty, was fined a record $100 million, served three years in prison and became an informant.

Early life and education[edit]

Boesky was born to a Jewish family[2][3] in Detroit, Michigan. His family owned several delicatessens and taverns in the city.[3] He attended the Cranbrook School in Bloomfield Hills before graduating from Detroit's Mumford High School. He then attended courses at Wayne State University, Eastern Michigan University and the University of Michigan. Despite lacking an undergraduate degree, he was admitted to Detroit College of Law (now Michigan State University College of Law) and graduated in 1965. In the 1980s, he served as an adjunct professor at Columbia University's Graduate School of Business and at New York University's Graduate School of Business.[4]

Career[edit]

In 1966, Boesky and his wife relocated to New York where he worked for several stock brokerage companies, including L.F. Rothschild and Edwards & Hanly. In 1975, he initiated his own stock brokerage company, Ivan F. Boesky & Company, with $700,000 (equivalent to $4 million in 2023) worth of start-up money from his wife's family[3] with a business plan that speculated on corporate takeovers. The company grew from profits as well as buy-in investments from new partnerships. By 1986, he had become an arbitrageur who had amassed a fortune of more than US$200 million by betting on corporate takeovers and the $136 million in proceeds from the sale of The Beverly Hills Hotel.[5] He made the cover of Time magazine for December 1, 1986.[6]

In 1986, Boesky entered into a plea agreement with the United States Attorney's Office for the Southern District of New York, agreeing to plead guilty to one count of Conspiracy to Commit Violations of the Federal Securities Laws.[7] He used inside information provided by Robert Wilkis and Ira Sokolow, two investment bankers, and purchased securities for entities with which he was affiliated.[8] The inside information typically involved tender offers, mergers or other possible business combinations, for companies such as Nabisco Brands, Inc., R.J. Reynolds, and Houston Natural Gas Corp.[8]

Although insider trading of this kind was illegal, laws prohibiting it were rarely enforced until Boesky was prosecuted.[9] He cooperated with the SEC and informed on others, including the case against financier Michael Milken and, per a plea bargain, received a prison sentence of 3+1⁄2 years and was fined US$100 million.[10] Although he was released after two years, he was permanently prohibited from working with securities. He served his sentence at Lompoc Federal Prison Camp near Vandenberg Air Force Base in California.[11]

Boesky, unable to rehabilitate his reputation after being released from prison, paid hundreds of millions of dollars as fines and compensation for his Guinness share-trading fraud role and a number of separate insider-dealing scams. Later, he began practicing Judaism, attended classes at and donating money to the Jewish Theological Seminary of America. In 1987, after the financial scandal fallout, he asked his name be removed from the Jewish Theological Seminary Library.[12]

Personal life[edit]

In 1962, Boesky married Seema Silberstein, the daughter of a Detroit real estate magnate whose holdings included The Beverly Hills Hotel in California. After her father's death, they won a court battle against her sister and brother-in-law over the hotel's ownership.[3]

In 1991, Silberstein divorced Boesky and agreed to pay him $23 million and $180,000 a year for life. They had four children.[5]

Boesky and his second wife, Ana, had another child. They lived in La Jolla, California, until his death on May 20, 2024.[11][5][13]

In popular culture[edit]

The character of Gordon Gekko in the movie Wall Street (1987) is based in part on Boesky, particularly his "greed is good" speech which resembled the commencement speech Boesky delivered in May 1986 at the Haas School of Business at the University of California, Berkeley: "I think greed is healthy. You can be greedy and still feel good about yourself."[11][14][15][16]

Boesky was featured in a CNBC documentary entitled Empires of New York.[17]

References[edit]

  1. ^ Meserve, Myles. "Meet Ivan Boesky, The Infamous Wall Streeter Who Inspired Gordon Gekko". Business Insider. Retrieved February 2, 2019.
  2. ^ The New York Jewish Week: "Is Greed Godly?" by David E. Y. Sarna December 3, 2010
  3. ^ a b c d Haaratz: "This Day in Jewish History / A masterful Wall Street con man is arrested – Ivan Boesky elevated insider trading to an art form. The police didn't see it that way, though." by David B. Green November 14, 2013
  4. ^ Boesky, Ivan F., Merger Mania, Holt Rinehart Winston, 1985.
  5. ^ a b c Spangler, Nicholas; Davidowitz, Esther (October 30, 2010). "Seema Boesky's Rich Afterlife". Westchester Magazine. Archived from the original on November 3, 2010.
  6. ^ Ivan Boesky at the TIME archive
  7. ^ The Law of Insider Trading, How They Get Caught, SEC Commissioner Cox Remarks to the Piedmont Economic Club (PDF), November 20, 1986
  8. ^ a b Cox Speech
  9. ^ "Ivan Boesky – Sam Waksal – Insider Trading – Wall Street". New York. October 10, 2003. Retrieved February 9, 2021.
  10. ^ "THE YEAR'S 50 MOST FASCINATING BUSINESS PEOPLE: IVAN BOESKY, CROOK OF THE YEAR". money.cnn.com. January 5, 1986. Retrieved June 9, 2023.
  11. ^ a b c Wayne, Leslie (May 20, 2024). "Ivan F. Boesky, Rogue Trader in 1980s Wall Street Scandal, Dies at 87". The New York Times. Retrieved May 20, 2024.
  12. ^ Goldman, Ari L. (July 23, 1987). "Boesky Studying Hebrew and Talmud at Seminary". The New York Times.
  13. ^ "Miracle Babies Patron Party". October 8, 2015.
  14. ^ Dickerson, John F. (June 24, 2001). "Battling Boeskys". Time. ISSN 0040-781X. Retrieved February 9, 2021.
  15. ^ Greene, Bob (December 15, 1986). "A $100 Million Idea: Use Greed For Good". Chicago Tribune. Retrieved May 13, 2016.
  16. ^ "Commencement Speakers". berkeley.edu. Retrieved May 13, 2016.
  17. ^ Huddleston, Tom Jr. (November 28, 2020). "Meet Ivan Boesky, the 1980s Wall Street titan who inspired Hollywood — and ended up in jail". CNBC. Retrieved February 9, 2021.

External links[edit]

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