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Ivan F. Boesky, the brash financier who came to symbolize Wall Street greed as a central figure of the 1980s insider trading scandals, and who went to prison for his misdeeds, died on Monday at his home in the La Jolla neighborhood of San Diego. He was 87.<\/p>\n
His daughter Marianne Boesky said he died in his sleep.<\/p>\n
An inspiration for the character Gordon Gekko in Oliver Stone\u2019s movie \u201cWall Street\u201d and its sequel, Mr. Boesky made a fortune betting on stock tips, often passed to him illegally in exchange for suitcases of cash. His guilty plea to insider trading in November 1986 and his $100 million penalty, a record at the time, sent shock waves through Wall Street and set off a cascade of events that marked the end of a decade of frenzied takeover activity and the celebration of conspicuous wealth.<\/p>\n
As federal investigators closed in on Mr. Boesky, he agreed to cooperate, providing information that led to the downfall of the investment bank Drexel Burnham Lambert and its junk bond king, Michael Milken.<\/p>\n
Mr. Boesky brought an aggressive style to the once-sleepy world of arbitrage, the buying and selling of stocks in companies that appear to be takeover targets. Sniffing out impending deals, he amassed stock positions at levels never seen before.<\/p>\n<\/div>\n<\/div>\n
At the top of his game in the mid-1980s, he had a net worth of $280 million (about $818 million in today\u2019s currency) and a trading portfolio valued at $3 billion (about $8.7 billion today), much of it financed with borrowed money. Home was a sprawling estate<\/a> in Westchester County, N.Y., its main house adorned with a Renoir and carpets embossed with his monogram, \u201cIFB.\u201d (The estate was once owned by the Revson family, founders of Revlon cosmetics and, before that, the family behind Macy\u2019s, the Strauses.)<\/p>\n Besides a Manhattan pied-\u00e0-terre, there was a retreat on the French Riviera, a lavish Paris apartment and a condo in Hawaii. Through his first wife, Seema Boesky, he was part owner of the celebrated Beverly Hills Hotel, a lush pink concoction favored by Hollywood stars as well as by titans of finance attending the Predators\u2019 Ball, Drexel Burnham\u2019s annual get-together.<\/p>\n<\/div>\n<\/div>\n Mr. Boesky claimed to sleep only two to three hours a night, rising at 4:30 a.m. to work out before taking a limousine to his New York office, where he stood command over an array of video terminals, news wires and stock tickers, as well as 160 telephone lines and a set of screens allowing him to see and hear his employees at all times. Each day he dressed the same way: in a signature three-piece black suit and starched white shirt, with a gold chain dangling from his vest pocket. He preferred to stand all day than to sit, and he barely ate, consuming vast amounts of coffee instead.<\/p>\n<\/div>\n<\/div>\n On Wall Street, it was a decade born of greed. Fueled by the easy money of junk bonds, a small group of kingmakers, including Carl Icahn, T. Boone Pickens,<\/a> James Goldsmith<\/a>, Saul Steinberg<\/a>, Mr. Boesky and Mr. Milken, became fabulously wealthy by engaging in schemes of financial engineering and corporate raids that drove the stock market to dizzying levels before its crash in 1987.<\/p>\n<\/div>\n<\/div>\n Mr. Boesky embraced the go-go ethos of the time. \u201cGreed is all right, by the way,\u201d he told business school students at the University of California, Berkeley, in a commencement speech in 1986. \u201cI think greed is healthy. You can be greedy and still feel good about yourself.\u201d He was greeted with rousing applause.<\/p>\n A year later, those words were immortalized onscreen in \u201cWall Street,\u201d in which the unscrupulous corporate raider Gordon Gekko (played by Michael Douglas) gives his famous \u201cGreed is good\u201d speech.<\/p>\n \u201cAll that mattered to Ivan Boesky was making money,\u201d Jeff Madrick, the author of \u201cAge of Greed\u201d (2011), said in an interview for this obituary in 2019. \u201cHe found a path to that and he abused it badly.\u201d<\/p>\n Mr. Boesky touted his success whenever he could. In 1985 he published a book, \u201cMerger Mania,\u201d which promoted his deal-making skills and his uncanny ability to identify the next takeover target. But behind Mr. Boesky\u2019s success was a story of deceit: He was paying others to provide him with insider information.<\/p>\n<\/div>\n<\/div>\n One of his biggest sources was Martin Siegel, at the time an investment banker at Kidder, Peabody & Company. The two hatched their scheme in 1982, and soon Mr. Boesky was having a courier deliver suitcases filled with $100 bills to Mr. Siegel \u2014 $150,000 one time, $200,000 another time and $400,000 a third \u2014 in exchange for inside information about forthcoming takeovers. Using the code words \u201cred light\u201d and \u201cgreen light\u201d for the handoff, the courier delivered the suitcases to Mr. Siegel in the lobby of the Plaza Hotel in Manhattan.<\/p>\n But by 1986 Mr. Boesky\u2019s world had begun to unravel. In May, when a lower-level Drexel banker, Dennis Levine, was indicted on insider trading charges, federal prosecutors found Mr. Boesky\u2019s name in his notes; he had been paying Mr. Levine for tips. Hot on Mr. Boesky\u2019s trail was Rudolph W. Giuliani, the United States attorney who had been bringing down Mafia dons and crooked politicians and was now focused on Wall Street malfeasance.<\/p>\n In September 1986, Mr. Boesky was invited to one of the most lavish bar mitzvahs in memory. Gerald Guterman, a real estate developer, paid nearly $1 million to rent the entire Queen Elizabeth 2<\/a> to celebrate his son, taking guests on a cruise up the Hudson River and out into the Atlantic. Huge banners, clowns, musicians and a crew of 1,000 greeted the guests. But Mr. Boesky was nowhere to be seen.<\/p>\n Claiming he had missed the sailing, Mr. Boesky staged his arrival: A helicopter descended from the sky and landed on the ship. As its blades whirred, guests craned their necks to watch as Mr. Boesky emerged in a tuxedo and black tie, by all accounts looking like a latter-day James Bond and completely upstaging the host family.<\/p>\n<\/div>\n<\/div>\n The next day, Sept. 17, Mr. Boesky surrendered to the federal authorities and agreed to wear a wire in his conversations with Mr. Milken and others on Wall Street.<\/p>\n Ivan Frederick Boesky was born in Detroit on March 6, 1937, to Helen and William Boesky. His father was a Jewish immigrant from Russia. The family ran a string of restaurants under the name Brass Rail that became strip clubs as the city declined. The business eventually went bankrupt.<\/p>\n As a 13-year-old, and without a driver\u2019s license, Ivan drove an ice cream truck for nickels and dimes. (In later years he named one of his investment vehicles, Farnsworth & Hastings, after the street corner location of his family\u2019s business.)<\/p>\n For a year Ivan attended Cranbrook, a prestigious prep school outside Detroit, where he excelled at wrestling and in later years left many with the impression that he was a graduate; he had actually left Cranbrook and graduated from Mumford High School, in middle-class Detroit.<\/p>\n He attended three colleges \u2014 Wayne State, the University of Michigan and Eastern Michigan \u2014 and graduated from none of them. It took him five years, after dropping out twice, to get a degree in 1964 from the Detroit College of Law. He got a one-year clerkship with a federal judge through connections, was rejected by Detroit\u2019s top law firms, and worked as an accountant at the local Touche Ross office.<\/p>\n<\/div>\n<\/div>\n Mr. Boesky\u2019s marriage in 1962 to Seema Silberstein, a daughter of Ben Silberstein, a real estate developer who owned the Beverly Hills Hotel, catapulted him into a world of wealth and sophistication. He was unable to find his professional footing until he was 27, when a former Cranbrook classmate who was working at Bear Stearns told him about arbitrage. Hooked on the idea, he moved to New York, where his father-in-law bought the young couple a Park Avenue apartment.<\/p>\n He cycled through jobs, working as a trainee at the investment banking firm L.F. Rothschild, an analyst at First Manhattan Company and an arbitrageur at Kalb, Voorhis, where his losing $20,000 got him fired. In 1971, Mr. Boesky went to the brokerage firm Edwards & Hanly, where he first displayed his aggressive style, betting millions into a single stock position and incurring a $10,000 fine for selling securities, which he didn\u2019t have, short.<\/p>\n By 1975 the firm was bankrupt, and Mr. Boesky decided to strike out on his own. Backed by $700,000 from his wife\u2019s family, he started Ivan F. Boesky & Company.<\/p>\n The arbitrage business was accustomed to small, cautious investments in publicly announced takeovers, with hopes that the stock price would rise. But Mr. Boesky bet big.<\/p>\n He put down multimillion-dollar wagers \u2014 $10 million, and even $100 million or more \u2014 on companies that he thought might be takeover targets, before any deals were announced. He relied heavily on borrowed money and kept the bulk of any gains for himself: His partners would get 40 percent, and he would take 60. His partners would absorb 90 percent of any losses, and he would take 10 percent.<\/p>\n<\/div>\n<\/div>\n On Wall Street, he was given two monikers: Piggy and Ivan the Terrible. He was known for going into fancy restaurants and ordering every dish on the menu, tasting them and then nibbling on one dish while ignoring the rest.<\/p>\n He once showed up to play tennis in a pink Rolls-Royce. And he loved to entertain at the Harvard Club in Manhattan, even though he had never attended Harvard. (He made a large donation to the university\u2019s School of Public Health, which named him to its board of overseers, making him eligible for club membership.) He told investors that he was an adjunct professor at Columbia Business School. The school said that was not true.<\/p>\n<\/div>\n<\/div>\n Mr. Boesky made an estimated $65 million when Chevron acquired Gulf, $50 million when Texaco bought Getty, and $50 million from Philip Morris\u2019s acquisition of General Foods. Other multimillion-dollar home runs \u2014 some helped by information that the Securities and Exchange Commission said was obtained illegally \u2014 involved deals with Nabisco Brands, Union Carbide and Boise Cascade.<\/p>\n Mr. Boesky\u2019s closest ally in the world of finance was Mr. Milken, head of Drexel Burnham\u2019s fabled junk bond desk in Los Angeles. The two spoke daily, with Mr. Milken arranging for much of the capital behind Mr. Boesky\u2019s trades and Mr. Boesky becoming a profit center for Mr. Milken. Their fingers were on nearly every takeover deal, their every move followed in the financial press.<\/p>\n<\/div>\n<\/div>\n After turning himself in to federal investigators, Mr. Boesky, in an appeal for leniency, agreed to become a government informant, wearing a wire when meeting with Mr. Milken \u2014 who was an even bigger target of federal prosecutors.<\/p>\n \u201cMilken and Boesky were deeply intertwined in what was a sweeping criminal conspiracy,\u201d James B. Stewart wrote in his book \u201cDen of Thieves\u201d (1991). \u201cTaken together, the ventures were practically a catalogue of securities crimes, starting with insider trading, and including false public disclosures, tax fraud and market manipulation, as well as a slew of more technical crimes.\u201d<\/p>\n In the end, Mr. Milken, too, would end up in prison and pay an even bigger fine, $600 million. In February 2020, he received a pardon<\/a> from President Donald J. Trump.<\/p>\n Mr. Boesky pleaded guilty to insider trading charges in November 1986 and agreed to pay $100 million \u2014 a $50 million fine and $50 million in repayment of illegal trading profits. (He was later able to deduct half of his $100 million penalty from his income taxes.)<\/p>\n<\/div>\n<\/div>\n In December 1987, Mr. Boesky was sentenced to a three-year prison term. He spent 18 months at the Lompoc federal prison camp, a minimum-security facility in Santa Barbara County, Calif., followed by four months at a Brooklyn halfway house. While in prison, he studied the Talmud and earned pocket change by working on a prison cleanup crew. He later admitted to violating prison rules by paying fellow inmates to do his laundry.<\/p>\n He emerged from prison in 1990. He was 53. In 1991, his wife of 30 years sued him for divorce. Pleading poverty, he asked for half of her $100 million fortune; he settled for<\/a> $20 million, annual payments of $180,000 and a $2.5 million California home.<\/p>\n For many years, Mr. Boesky lived quietly in La Jolla, where he remarried and became a father again.<\/p>\n In addition to his daughter Marianne, he is survived by three sons from his first marriage, William, Theodore and Johnathan; his wife, Ana (Serrano) Boesky; their daughter, Blu Boesky; and four grandchildren.<\/p>\n In a 1985 interview with The Washington Post, Mr. Boesky gave a remarkably prescient view of his ultimate downfall. \u201cI can\u2019t predict my demise,\u201d he said. \u201cBut I suspect it will occur abruptly.\u201d It did; within a year he was arrested and charged with insider trading.<\/p>\n Alex Traub contributed reporting.<\/p>\n<\/div>\n<\/div>\n\u2018Greed Is Healthy\u2019<\/h2>\n
A Boy From Detroit<\/h2>\n
A Quieter Life<\/h2>\n