Ivan Boesky, Convicted of Insider Trading in 1980s, Dies at 87
What You Need to Know
As junk bonds fueled a wave of hostile acquisitions, Boesky became the archetype of the savvy speculator, reaping hundreds of millions of dollars in profits on takeover bets.
He was believed to have been the model for the character of Gordon Gekko, the rapacious villain played by Michael Douglas in the 1987 film Wall Street.
He was sentenced to three years in prison for insider trading, but was released after serving about two years.
Ivan Boesky, who reached the pinnacle of fame and fortune as a high-flying Wall Street arbitrageur in the 1980s only to be exposed as a cheat in the insider-trading scandal that defined the era, has died. He was 87.
The New York Times reported his death, citing his daughter, Marianne Boesky. No details were immediately available.
As junk bonds fueled a wave of hostile acquisitions, Boesky became the archetype of the savvy speculator, reaping hundreds of millions of dollars in profits on takeover bets.
Then, after admitting to insider trading, Boesky became the poster child for Wall Street greed, his elongated face and toothy smile on the cover of Time magazine with the headline, “Ivan the Terrible.”
He spent two years in prison.
Boesky’s case set off shock waves not only on Wall Street but across the US, confirming some investors’ worst fears about how capital markets worked.
He was believed to have been the model for the character of Gordon Gekko, the rapacious villain played by Michael Douglas in the 1987 film “Wall Street.” Gekko’s speech in the movie, declaring that “greed is good,” echoed Boesky’s own assessment.
“Greed is all right, by the way,” Boesky told graduates of the University of California at Berkeley’s business school in 1986, months before his downfall. “I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself.”
Michigan Bars
Ivan Frederick Boesky was born on March 6, 1937, in Detroit, the second child of William and Helen Boesky. His father ran a chain of local bars, called the Brass Rail.
At age 12, Boesky attended Cranbrook, a prestigious private academy in Bloomfield Hills, a Detroit suburb, where he became fanatical about wrestling and received a trophy as “wrestler of the year.” Despite the athletic success, he left Cranbrook abruptly before graduating and transferred to a public school.
Boesky attended Wayne State University in Detroit, the University of Michigan and Eastern Michigan University. He didn’t finish but attended Detroit College of Law, where he earned a degree in 1964.
By that time, Boesky had married Seema Silberstein, daughter of Detroit real estate developer Ben Silberstein, whose properties included the Beverly Hills Hotel. He clerked for a federal judge in Detroit, a Silberstein relative, but was unable to land a job at one of the city’s top law firms.
After his father’s death in 1964, Boesky took over the last remaining Brass Rail bar, which by then featured topless dancers, and renamed it Le Club a-Go-Go, according to a 1993 Vanity Fair article. Two years later it went bankrupt and Boesky moved to New York, where he started a new career on Wall Street.
After several years working at financial firms where he learned the business of risk arbitrage, Boesky started his own investment fund in 1975 with $700,000 from his in-laws.
After six years of betting on the stocks of companies that were in play, he formed a new fund, just in time for a wave of takeovers that changed the landscape of corporate America.
