Ivan Boesky, a onetime Wall Street titan who personified the excesses of the 1980s — helping inspire Hollywood’s fictional mogul Gordon Gekko and his greed-is-good mantra — but who came to a crashing end with insider-trading revelations that sent him to prison as part of one of the most sweeping securities scandals in history, died May 20 at his home in La Jolla, Calif. He was 87.
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Key takeaways
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- He helped inspire Hollywood’s fictional financial mogul Gordon Gekko and his greed-is-good mantra.
- He cut a deal to cooperate with the feds and help take down Michael Milken, the “junk bond king.”
- The former Wall Street titan served nearly two years in prison for insider trading.
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His wife, Ana Boesky, confirmed his death but did not cite a cause.
Mr. Boesky was hardly the only strike-it-rich trader in the cowboy capitalism of the ’80s. Leveraged buyouts, hostile takeovers and shotgun-wedding mergers opened rivers of cash for investors and dealmakers of all stripes as companies became prey. Even among Wall Street’s newly minted grandees, Mr. Boesky stood out. He portrayed himself as the hungriest man at the trough.
He claimed to survive on three hours of sleep, endless infusions of coffee (“vampire’s plasma,” he called it) and the adrenaline rush of arbitrage, a once-sleepy corner of financial markets that turned into the era’s gold rush. Arbitragers, or arbs, tried to snap up shares in companies seen as ripe for acquisition. The right bets could pay off big if share prices spiked.
Such speculation is perfectly legal if based on information in the public domain. But Mr. Boesky had a secret pipeline. He received tips from investment bankers and others who knew where money and strategies were coming together for takeover bids.
Mr. Boesky paid for the intel and then netted multimillion-dollar returns. At his apex, in the mid-1980s, he had an estimated $3 billion to invest and cultivated a Midas-touch image. Investors, unaware of Mr. Boesky’s illegal dealings, begged for a piece of the action as takeover fever took hold — encouraged in part by the light-touch approach of the Reagan administration to antitrust enforcement.
Mr. Boesky made it seem as though he couldn’t miss. Fortune magazine called him a “money machine.” He made sure people noticed: riding to his Fifth Avenue office in a limousine bearing his initials and hosting clients at Manhattan’s Harvard Club, hoping that they would assume he was an Ivy Leaguer.
Like a latter-day Gatsby, Mr. Boesky obscured his real background — a college dropout whose father ran a topless bar in Detroit.
Wall Street veterans took to calling Mr. Boesky “Piggy” for his crass bluster and unabashed self-promotion. With journalists, he tossed out analogies for his go-go lifestyle. “A Mercedes on the autobahn that doesn’t stop running,” was one he told The Washington Post in 1985.
Other times, he was described as a throwback to a brooding Gilded Age robber baron, with his black three-piece suits, gold pocket watch on a chain and long, hangdog visage usually set somewhere between a scowl and a smirk. A mile-wide smile showed up, however, when he flexed his power, as he did when he made a grand entrance arriving by helicopter on the Queen Elizabeth II ocean liner.
“Greed is all right, by the way,” he told the graduating class in 1986 at the University of California at Berkeley. “I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself.”
That drive to rule his world turned into Mr. Boesky’s undoing.
Like Gordon Gekko in Oliver Stone’s 1987 drama “Wall Street” — in which Gekko (Michael Douglas) proclaims that “greed, for lack of a better word, is good” — Mr. Boesky became the centerpiece of what in his case was a real-life morality play.
“Not unlike turning another chapter in an Agatha Christie mystery novel ‘Fraud on the Wall Street Express,’” Charles C. Cox, then the acting chairman of the Securities and Exchange Commission, said months after details of Mr. Boesky’s insider-trading network were made public in November 1986.
The network was a tight clique. Investment bankers such as Robert Wilkis and Ira Sokolow passed along tips about brewing mergers and acquisitions to Dennis Levine, an executive at the investment bank Drexel Burnham Lambert, according to the SEC. Levine funneled the information to Mr. Boesky.
The deals probed by the SEC included a major buy of Nabisco Brands stock in May 1985 before the announcement by tobacco giant R.J. Reynolds of exploratory takeover talks. Mr. Boesky made about $4 million even though the blockbuster acquisition bid fell through. That same month, he invested heavily in Houston Natural Gas after being tipped about a takeover by InterNorth Inc. (which became the fraud-ridden company Enron), pulling in $4.1 million for Mr. Boesky.
The SEC charges did not cover earlier trading wins for Mr. Boesky, which included buying Getty Oil stock in 1984 before anyone suspected it was a takeover target. Mr. Boesky walked away with at least $30 million. But Mr. Boesky reportedly acknowledged to investigators that his insider trading went back to at least 1982, beginning with a successful attempt to recover from huge losses in an arbitrage gamble that tanked.
Hundreds of millions of dollars were pocketed by traders using insider tips in the 1980s. Mr. Boesky and others in his network were convicted and jailed, along with dozens of other figures from Wall Street, investment banking, the corporate world and elsewhere in the money chain.
But Mr. Boesky had one last deal to cut before he went down. He agreed to cooperate with federal investigators. A top target was one of the godfathers of the takeover feeding frenzy, Michael Milken, the so-called “junk bond king.” Milken virtually conjured a new market of high-yield, high-risk bonds that were often used to finance leveraged buyouts and hostile acquisitions.
In a suite at the Beverly Hills Hotel, in which Mr. Boesky once held a controlling stake, he wore a wire in 1986 to try to ensnare Milken, who seemed to sense the SEC was closing in.
“You’ve got to be careful,” Milken told Mr. Boesky, according to an account in “Den of Thieves” (1991), a tale of the insider-trading era by journalist James B. Stewart. “Electronic surveillance has gotten very sophisticated.”
Mr. Boesky pleaded guilty to one criminal charge and agreed to pay $100 million. He served nearly two years of a three-year sentence at the Lompoc federal prison camp in California. He was released in 1990 from a Brooklyn halfway house, gaunt, sporting a shaggy white beard and permanently barred from working in U.S.-based securities.
Milken pleaded guilty in 1990 to six criminal charges, and he served two years in prison. His former firm, Drexel Burnham Lambert, disbanded. Milken reinvented himself after prison as a consultant and philanthropist whose good deeds included funding cancer research. He was pardoned by President Donald Trump in 2020.
“More than nearly anyone else, Boesky became the symbol of the insider-trading scandal and what outraged the public,” said Marc Steinberg, a law professor at Southern Methodist University in Dallas and expert in securities fraud. “He represented the rich helping the rich all get richer.”
(“Wall Street” co-writer Stanley Weiser said the Gekko character also drew from takeover specialist Carl Icahn and investor Michael Ovitz, who later led the Walt Disney Co.)
During the publicity tour for his 1985 book, “Merger Mania: Arbitrage: Wall Street’s Best Kept Money-Making Secret,” Mr. Boesky was asked by Washington Post reporter David Vise about why he continued to push himself.
“What are you chasing?” Vise asked.
Mr. Boesky described himself as a racehorse. Then he went off on a dark, and seemingly prophetic, tangent.
“It’s quite possible that tomorrow you’ll see my epitaph,” he said, “and it will be something like ‘news pending, stop trading.’”
Struggled in school
Ivan Frederick Boesky was born in Detroit on March 6, 1937. His father, who left czarist Russia five years before the 1917 Bolshevik Revolution, owned bars in Detroit, and brought in topless waitresses and strip shows to boost profits. His mother was a homemaker and kept a tidy Tudor-style house.
As a high school wrestler, Mr. Boesky was a star. School, however, was a slog. He bounced around various colleges in Michigan without getting a degree. He then traveled to Iran in the late 1950s to visit former high school exchange student and wrestling teammate Houshang Wekili, who decades later became one of Mr. Boesky’s closest confidants and co-owner of several properties, including a villa on the French Riviera. The villa and other properties were sold off after Mr. Boesky’s conviction.
Mr. Boesky returned to the United States in 1959 and enrolled in the Detroit College of Law (now part of Michigan State University), which at the time did not require that students have a bachelor’s degree. He graduated in 1964 after twice dropping out.
In 1962, he married Seema Silberstein, whose father, Ben, was a Detroit-based real estate developer with holdings that included the Beverly Hills Hotel. (Mr. Boesky and his wife gained a controlling interest in the hotel after Ben Silberstein’s death in 1979. They sold it in 1986.)
Mr. Boesky took a clerkship with a federal district judge, a job arranged by his father-in-law. But Wall Street caught his imagination. Again, his father-in-law smoothed the way, setting up Mr. Boesky and his wife in a Park Avenue apartment. Mr. Boesky became a trainee at a brokerage and then left after a year to immerse himself in arbitrage, which at the time mostly yielded modest returns by buying commodities on one market and selling them on another.
In 1975, with $700,000 that included a big chunk from his father-in-law, Mr. Boesky opened an arbitrage firm bearing his name. He fully expected his staff to share his workaholic tendencies. If Mr. Boesky was not in the office, he called at 7:01 a.m. and flew into a rage if no one was there. “He treats us all equally,” Mr. Boesky’s lawyer, Stephen Fraidin, once told The Post, “like dogs.”
Mr. Boesky opened up a new shop, Boesky Corp., in 1980, just before one of the first major acquisitions of the decade: the chemical giant DuPont’s $7.8 billion takeover of the Conoco oil company.
Mr. Boesky bet big on Conoco stock and walked away with nearly $40 million in profits. Then, in 1982, the oil company Cities Service (a predecessor of Citgo) appeared in the crosshairs of corporate raider T. Boone Pickens. Gulf Oil got into the bidding.
Mr. Boesky plowed nearly all his company’s money into Cities Service stock. A deal with Gulf collapsed and left Mr. Boesky on the brink of financial ruin. His next move, according to accounts in “Den of Thieves,” was to contact Milken at Drexel’s Beverly Hills office for quick financing. Channels were open for Mr. Boesky, including an introduction to Martin Siegel, a hotshot Drexel investment banker. This would be described as the beginning of Mr. Boesky’s insider-trading run. (Siegel, too, was later convicted.)
At Mr. Boesky’s sentencing in December 1987, his attorney Leon Silverman made a case for leniency. He said that Mr. Boesky was a “leper in the financial community” for assisting the SEC, and that his situation was perhaps made even worse by his once having lorded over Wall Street. “No one,” Silverman said, “will take his calls.”
Mr. Boesky’s first marriage ended in divorce three years after his release from custody in 1990. He married Ana Serrano in 2000 and settled in San Diego’s elite La Jolla enclave, where he hosted parties, dabbled in business ventures and immersed himself in studies of the Talmud and other tenets of Judaism.
Survivors include four children from his first marriage; a daughter from his second marriage; and four grandchildren.
For all his braggadocio about money and greed, Mr. Boesky had a philanthropic streak. He doled out donations during his heyday to such institutions as the Metropolitan Museum of Art, the American Ballet Theatre and the Jewish Theological Seminary.
Yet Mr. Boesky always came back to his quest for dollars, lots and lots of them. In an 1984 interview with the Atlantic, he envisioned a tower of 500 million silver dollars.
“I wonder how tall that would be. It would be like Jacob’s ladder, wouldn’t it?” he said. “A Jacob’s ladder of silver dollars. Imagine. Wouldn’t that be an aphrodisiac experience, climbing to the top of such a ladder?”
