Ivan Frederick Boesky (born March 6, 1937) is a former American stock trader who became infamous for his prominent role in an

insider trading Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information ...

scandal that occurred in the United States during the mid-1980s. He was charged and pled guilty to insider trading, was fined a record $100 million, served three years in prison and became an informant.

Early life and education

Boesky was born to a

Jewish Jews ( he, יְהוּדִים, , ) or Jewish people are an ethnoreligious group and nation originating from the Israelites Israelite origins and kingdom: "The first act in the long drama of Jewish history is the age of the Israelites""The ...

familyHaaratz: "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 in

Detroit, Michigan Detroit ( , ; , ) is the largest city in the U.S. state of Michigan. It is also the largest U.S. city on the United States–Canada border, and the seat of government of Wayne County. The City of Detroit had a population of 639,111 at ...

. His family owned several delicatessens and taverns in the city. He attended the Cranbrook School in

Bloomfield Hills Bloomfield Hills is a small city (5.04 sq. miles) in Oakland County, Michigan, Oakland County in the U.S. state of Michigan. It is a northern suburb of Metro Detroit and is approximately northwest of Downtown Detroit. Except a small southern bo ...

before graduating from Detroit's

Mumford High School Samuel C. Mumford High School is a public high school located on the near-northwest side of Detroit, Michigan. It was operated by the Detroit Public Schools, and had been operated by the Education Achievement Authority of Michigan (EAA). DPS r ...

. He then attended courses at

Wayne State University Wayne State University (WSU) is a public research university in Detroit, Michigan. It is Michigan's third-largest university. Founded in 1868, Wayne State consists of 13 schools and colleges offering approximately 350 programs to nearly 25,000 ...

Eastern Michigan University Eastern Michigan University (EMU, Eastern Michigan or simply Eastern), is a public research university in Ypsilanti, Michigan. Founded in 1849 as Michigan State Normal School, the school was the fourth normal school established in the United Sta ...

and the

University of Michigan , mottoeng = "Arts, Knowledge, Truth" , former_names = Catholepistemiad, or University of Michigania (1817–1821) , budget = $10.3 billion (2021) , endowment = $17 billion (2021)As o ...

. Despite lacking an undergraduate degree, he was admitted to Detroit College of Law (now

Michigan State University College of Law The Michigan State University College of Law (Michigan State Law or MSU Law) is the law school of Michigan State University, a public research university in East Lansing, Michigan. Established in 1891 as the Detroit College of Law, it was the fi ...

) and graduated during 1965. In the 1980s, he served as an adjunct professor at

Columbia University Columbia University (also known as Columbia, and officially as Columbia University in the City of New York) is a private research university in New York City. Established in 1754 as King's College on the grounds of Trinity Church in Manhatt ...

's Graduate School of Business and at

New York University New York University (NYU) is a private research university in New York City. Chartered in 1831 by the New York State Legislature, NYU was founded by a group of New Yorkers led by then-Secretary of the Treasury Albert Gallatin. In 1832, the ...

's Graduate School of Business. During 1962, he married Seema Silberstein, the daughter of a Detroit real estate magnate whose holdings included

The Beverly Hills Hotel The Beverly Hills Hotel, also called the Beverly Hills Hotel and Bungalows, is located on Sunset Boulevard in Beverly Hills, California. One of the world's best-known hotels, it is closely associated with Hollywood film stars, rock stars, and cel ...

in California. After his father-in-law’s death, Boesky and Seema won a court battle with her sister and brother-in-law over the hotel’s ownership.

Career

In 1966, Boesky and his wife relocated to New York where he worked for several stock brokerage companies, including

L.F. Rothschild L.F. Rothschild (later known as L.F. Rothschild, Unterberg, Towbin) was a merchant and investment banking firm based in the United States and founded in 1899. The firm collapsed following the 1987 stock market crash. History L.F. Rothschild ...

and Edwards & Hanly. In 1975, he initiated his own stock brokerage company, Ivan F. Boesky & Company, with $700,000 (equivalent to $ million in ) worth of start-up money from his wife’s family with a business plan that speculated on corporate takeovers. Boesky's company grew from profits as well as buy-in investments from new partnerships. By 1986, Boesky had become an

arbitrage In economics and finance, arbitrage (, ) is the practice of taking advantage of a difference in prices in two or more markets; striking a combination of matching deals to capitalise on the difference, the profit being the difference between the ...

ur who had amassed a fortune of more than US$200 million by betting on corporate

takeover In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to t ...

s and the $136 million in proceeds from the sale of

.Westchester Magazine: "Seema Boesky’s Rich Afterlife - Juggling philanthropy, business, family, and love" By Nicholas Spangler with Esther Davidowitz
November 2010 Boesky was on the cover of ''

Time Time is the continued sequence of existence and events that occurs in an apparently irreversible succession from the past, through the present, into the future. It is a component quantity of various measurements used to sequence events, to ...

'' magazine December 1, 1986. In 1986, Boesky entered into a plea agreement with the United States Attorneys 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. Boesky used inside information provided by Robert Wilkis and Ira Sokolow, two investment bankers, and purchased securities for entities Boesky was affiliated with. 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. Although insider trading of this kind was illegal, laws prohibiting it were rarely enforced until Boesky was prosecuted. Boesky cooperated with the SEC and informed on others, including the case against financier

Michael Milken Michael Robert Milken (born July 4, 1946) is an American financier. He is known for his role in the development of the market for high-yield bonds ("junk bonds"), and his conviction and sentence following a guilty plea on felony charges for vio ...

. As a result of a

plea bargain A plea bargain (also plea agreement or plea deal) is an agreement in criminal law proceedings, whereby the prosecutor provides a concession to the defendant in exchange for a plea of guilt or '' nolo contendere.'' This may mean that the defendan ...

, Boesky received a

prison A prison, also known as a jail, gaol (dated, standard English, Australian, and historically in Canada), penitentiary (American English and Canadian English), detention center (or detention centre outside the US), correction center, correc ...

sentence of years and was fined US$100 million. Although he was released after two years, he was permanently prohibited from working with

securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

. He served his sentence at Lompoc Federal Prison Camp near

Vandenberg Air Force Base Vandenberg may refer to: * Vandenberg (surname), including a list of people with the name * USS General Harry Taylor (AP-145), USNS ''General Hoyt S. Vandenberg'' (T-AGM-10), transport ship in the United States Navy, sank as an artificial reef in K ...

in California. 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 The Guinness share-trading fraud was a major business scandal of the 1980s. It involved the manipulation of the London stock market to inflate the price of Guinness shares to thereby assist Guinness's £4 billion takeover bid for the Scottish dr ...

role and a number of separate insider-dealing scams. Later, Boesky began practicing

Judaism Judaism ( he, ''Yahăḏūṯ'') is an Abrahamic, monotheistic, and ethnic religion comprising the collective religious, cultural, and legal tradition and civilization of the Jewish people. It has its roots as an organized religion in the ...

and attended classes at the

Jewish Theological Seminary of America The Jewish Theological Seminary (JTS) is a Conservative Jewish education organization in New York City, New York. It is one of the academic and spiritual centers of Conservative Judaism and a major center for academic scholarship in Jewish studie ...

where he had been a major donor; however, during 1987, after the fallout from his financial scandal, ''The New York Times'' reported that "after Ivan F. Boesky had been fined $100 million in the insider-trading scandal, the Jewish Theological Seminary, acting at his request, took his name off its $20 million library."Goldman, Ari L. (July 23, 1987)
"Boesky Studying Hebrew and Talmud at Seminary"
''

The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...

''.

Personal life

In 1991, he divorced his wife and she agreed to pay him $23 million and $180,000 a year for life. They have four children. His daughter Marianne is an art dealer. His second wife is Ana Boesky and they have a child. They live in

La Jolla, California La Jolla ( , ) is a hilly, seaside neighborhood within the city of San Diego, California, United States, occupying of curving coastline along the Pacific Ocean. The population reported in the 2010 census was 46,781. La Jolla is surrounded on ...

. Stuart J. Boesky is his first cousin.

In popular culture

The character of

Gordon Gekko Gordon Gekko is a composite character in the 1987 film '' Wall Street'' and its 2010 sequel '' Wall Street: Money Never Sleeps'', both directed by Oliver Stone. Gekko was portrayed by actor Michael Douglas, whose performance in the first fil ...

in the movie ''

Wall Street Wall Street is an eight-block-long street in the Financial District of Lower Manhattan in New York City. It runs between Broadway in the west to South Street and the East River in the east. The term "Wall Street" has become a metonym for t ...

'' (1987) is based at least in part on Boesky, especially regarding a famous speech he delivered in May 1986 on the positive aspects of greed during a commencement ceremony at the

Haas School of Business The Walter A. Haas School of Business, also known as Berkeley Haas, is the business school of the University of California, Berkeley, a public research university in Berkeley, California. It was the first business school at a public university i ...

UC Berkeley The University of California, Berkeley (UC Berkeley, Berkeley, Cal, or California) is a public university, public land-grant university, land-grant research university in Berkeley, California. Established in 1868 as the University of Californi ...

, where he said in part "I think greed is healthy. You can be greedy and still feel good about yourself". Boesky has been featured in a

CNBC CNBC (formerly Consumer News and Business Channel) is an American basic cable business news channel. It provides business news programming on weekdays from 5:00 a.m. to 7:00 p.m., Eastern Time, while broadcasting talk sho ...

documentary entitled the ''Empires of New York''. The conviction of Boesky is referenced at various points in the television film ''

Barbarians at the Gate ''Barbarians at the Gate: The Fall of RJR Nabisco'' is a 1989 book about the leveraged buyout (LBO) of RJR Nabisco, written by investigative journalism, investigative journalists Bryan Burrough and John Helyar. The book is based upon a series of ...

'' (1993). He is referenced by The 80s Guy in the "

Future Stock "Future Stock" is the 21st episode in the third season of '' Futurama''. It originally aired on the Fox network in the United States on March 31, 2002. Plot Planet Express holds its stockholders' meeting, and the state of the business is not goo ...

" episode of ''

Futurama ''Futurama'' is an American animated science fiction sitcom created by Matt Groening for the Fox Broadcasting Company. The series follows the adventures of the professional slacker Philip J. Fry, who is cryogenically preserved for 1000 years a ...

''. In the season 2, episode 3 of the

USA Network USA Network (simply USA) is an American basic cable television channel owned by the NBCUniversal Television and Streaming division of Comcast's NBCUniversal through NBCUniversal Cable Entertainment. It was originally launched in 1977 as Madison ...

series ''

Psych ''Psych'' is an American detective comedy-drama television series created by Steve Franks for USA Network. The series stars James Roday as Shawn Spencer, a young crime consultant for the Santa Barbara Police Department whose "heightened observ ...

'' entitled ''Psy Vs Psy'', Boesky is referenced as being personally arrested by the major character of the episode, Special Agent Lars Ewing of the Federal Treasury Department. In Season 2, Episode 18 of the series "Gilmore Girls" entitled "Back in the Saddle Again," Rory's classmate says "I feel like Ivan Boesky" when Chip sees what Richard and Paris have set up for the economics class business fair group project meeting.

References

External links

''Taking America: How We Got from the First Hostile Takeover to Megamergers, Corporate Raiding, and Scandal''
by

Jeff Madrick Jeffrey G. Madrick is a journalist, economic policy consultant and analyst. He is editor of '' Challenge: The Magazine of Economic Affairs,'' visiting professor of humanities at The Cooper Union, and director of policy research at the Schwartz Cen ...

, Beard Books, 2003. Retrieved March 10, 2019. * {{DEFAULTSORT:Boesky, Ivan Frederick 1937 births 1986 crimes in the United States American businesspeople convicted of crimes American financial businesspeople American hoteliers 20th-century American Jews American people convicted of fraud American white-collar criminals Businesspeople from Detroit Corporate raiders Cranbrook Educational Community alumni Detroit College of Law alumni Living people People convicted of insider trading Stock and commodity market managers Mumford High School alumni Columbia Business School faculty New York University faculty 21st-century American Jews