Ivan Boesky, disgraced financier who inspired ‘greed is good’ mantra, dies at 87

NEW YORK – Mr Ivan Boesky, the financier who gave birth to the “greed is good” mantra before going to prison in one of the biggest Wall Street insider trading scandals of the 1980s, has died at the age of 87 in his home in San Diego.

His daughter, Ms Marianne Boesky, said he died in his sleep.

An inspiration for the character Gordon Gekko in director Oliver Stone’s film Wall Street 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 US$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.

As US investigators closed in on Mr Boesky, he agreed to cooperate, providing information that led to the downfall of investment bank Drexel Burnham Lambert and its junk bond king, Mr Michael Milken.

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.

At the top of his game in the mid-1980s, he had a net worth of US$280 million – about US$818 million (S$1.1 billion) in today’s currency – and a trading portfolio valued at US$3 billion (about US$8.7 billion today), much of it financed with borrowed money. Home was a sprawling estate in Westchester County, New York, its main house adorned with a Pierre-Auguste Renoir painting and carpets embossed with his monogram “IFB”.

Besides a Manhattan pied-a-terre, there was a retreat on the French Riviera, a lavish Paris apartment and a condo in Hawaii. Through his first wife, Ms Seema Boesky, he was part owner of the celebrated Beverly Hills Hotel, a lush pink concoction favoured by Hollywood stars as well as by titans of finance attending the Predators’ Ball, Drexel Burnham’s annual get-together.

‘Greed is healthy’

On Wall Street, it was a decade born of greed. Fuelled by the easy money of junk bonds, a small group of kingmakers – including Mr Carl Icahn, Mr T. Boone Pickens, Mr James Goldsmith, Mr Saul Steinberg, 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.

Mr Boesky embraced the go-go ethos of the time. “Greed is all right, by the way,” he told business school students at the University of California, Berkeley, in a commencement speech in 1986. “I think greed is healthy. You can be greedy and still feel good about yourself.” He was greeted with rousing applause.

A year later, those words were immortalised on screen in Wall Street, in which Gekko (played by actor Michael Douglas), an unscrupulous corporate raider, gives his famous “Greed is good” speech.

By 1986, Mr Boesky’s 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’s name in his notes; he had been paying Levine for tips. Hot on Mr Boesky’s trail was US attorney Rudy Giuliani, who had been bringing down Mafia dons and crooked politicians and was now focused on Wall Street malfeasance.

On Sept 17, Mr Boesky surrendered to federal investigators. In an appeal for leniency, agreed to become a government informant, wearing a wire when meeting with Mr Milken, who was an even bigger target of federal prosecutors.

A quieter life

In December 1987, Mr Boesky was sentenced to a three-year prison term. 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.

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 US$100 million fortune; he settled for US$20 million, annual payments of US$180,000 and a US$2.5 million California home.

For many years, Mr Boesky lived quietly in La Jolla, where he remarried and became a father again.

In addition to his daughter Marianne, he is survived by three sons from his first marriage, William, Theodore and Johnathan; his wife, Ms Ana (Serrano) Boesky; their daughter, Ms Blu Boesky; and four grandchildren.

In a 1985 interview with The Washington Post, Mr Boesky gave a remarkably prescient view of his ultimate downfall.

“I can’t predict my demise,” he said. “But I suspect it will occur abruptly.”

It did. Within a year, he was arrested and charged with insider trading. NYTIMES