Ivan Boesky, convicted trader, 1937-2024

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Ivan Boesky, a Wall Street arbitrageur whose insider trading in the megadeals of the 1980s made him a symbol of Wall Street greed and malfeasance, has died at the age of 87.

Boesky rose to fame as a merger expert with a seemingly superhuman ability to foresee business combinations. Dealmaking on Wall Street suddenly went into overdrive, making fortunes, including one for Boesky that he happily ignored. His 1986 speech to graduates of the business school of the University of California, Berkeley, extolling the virtues of greed, inspired Gordon Gekko’s catchphrase in Oliver Stone’s later film. Wall Street that ‘greed is good’.

In the mid-1980s, whispers that “Boesky is buying” could move the markets and provide the grease corporate raiders and others needed to make a deal. Never a robber or a banker himself, Boesky became a sought-after ally of financiers like Michael Milken, eager to keep the deals moving even as the mergers became increasingly deceptive and the bonds sold to finance them became increasingly junky .

In November 1986, Boesky pleaded guilty to conspiracy, unraveling not only his own myth-making but also the careers of Milken, against whom Boesky provided evidence, and others. Milken’s investment bank, Drexel Burnham Lambert, went bankrupt shortly afterwards.

In the wake of the Boesky trading scandal, Congress and the Securities and Exchange Commission adopted new rules defining insider trading for the first time, leading to an era of increased enforcement and providing a roadmap for future investigations into crimes on Wall Street.

Michael Douglas as Gordon Gekko in the movie 'Wall Street'
Michael Douglas as Gordon Gekko in the movie ‘Wall Street’ © Allstar Photo Library/Alamy

Boesky, the child of a middle-class Jewish family that ran restaurants in Detroit, came to Wall Street in the mid-1960s. He launched his own company with $700,000 from his wife’s family, long before hedge funds and independent trading firms were common on Wall Street.

Boesky was an early proponent of a then-obscure Wall Street strategy called merger arbitrage, a low-risk, low-return trading technique used to exploit small differences in the stock prices of two companies involved in a merger.

He reasoned that those small differences could be significantly larger and that the profits he could make even bigger by betting on unannounced mergers. There were some early failures, but in 1984 Boesky had a number of winning bets, none bigger than his bet on Chevron’s $13 billion acquisition of Gulf Oil. At the time, it was the largest American merger ever and netted Boesky and his investors $65 million. Other deals also earned him and his company tens of millions.

Boesky quickly became one of the most sought after people on Wall Street, by wealthy individuals and institutions wanting him to invest their money, and by other traders, bankers and journalists on the hunt for the next deal. He raised money on both sides of the Atlantic, eventually managing as much as $3 billion.

Ivan Boesky in a plane over New York, 1986
Ivan Boesky in a plane over New York in 1986 © Yves Gellie/Gamma-Rapho/Getty Images

Boesky ate little and slept less, which gave him a reputation for being on the phone all day. His Manhattan trading firm was equipped with dozens of television screens and more than 160 telephone lines, all of which seemingly served to explain his ability, legally, to predict deals ahead of others. Despite being a mediocre student, he taught college courses on mergers and its arbitrage techniques.

“By elevating merger arbitration to the status of an academic subject, Boesky is clearly trying to inject respect into what remains in many eyes a decidedly grubby business,” wrote the Financial Times in March 1986. Noting all the effort he seemed to be making The newspaper added: “It may be better to rely on an old-fashioned tip.”

Behind the scenes, Boesky’s success was driven by suitcases of cash, $100,000 or more at a time, delivered to Wall Street bankers in exchange for insider tips on upcoming deals.

After federal prosecutors, including then-U.S. Attorney Rudy Giuliani, caught up with him, Boesky paid $100 million and served 20 months in prison. He never returned to Wall Street.

His death was announced Monday by his daughter Marianne, one of Boesky’s four children, on the Instagram account of her New York City art gallery. “A beautiful soul who inspired me to work hard, care harder and always stay curious,” she wrote in the post.

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