Wall Street titan who inspired Gordon Gekko’s ‘greed is a good thing’ speech has died

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 takeovers, Boesky became the archetypal savvy speculator, reaping hundreds of millions of dollars in profits on his takeover bets. Then, after admitting to insider trading, Boesky became the epitome of Wall Street greed, his long face and toothy smile appearing on the cover of Time magazine with the headline “Ivan the Terrible.” . He spent two years in prison.

The Boesky affair set off shock waves not only on Wall Street but throughout the United States, confirming the worst fears of some investors about the functioning of financial markets. He was thought to have been the model for the character Gordon Gekko, the rapacious villain played by Michael Douglas in the 1987 film. Wall Street. Gekko’s speech in the film, declaring that “greed is a good thing”, echoes Boesky’s own assessment.

“Greed is a good thing, by the way,” Boesky told graduates of the University of California, Berkeley’s business school in 1986, months before his fall. “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 March 6, 1937, in Detroit, the second child of William and Helen Boesky. His father ran a chain of local bars, called Brass Rail.

At age 12, Boesky attended Cranbrook, a prestigious private academy located in Bloomfield Hills, a suburb of Detroit, where he became a wrestling fanatic and received the “Wrestler of the Year” trophy. Despite his athletic success, he left Cranbrook abruptly before graduating and transferring to a public school.

Boesky attended Wayne State University in Detroit, the University of Michigan and Eastern Michigan University. He did not complete his education but attended the Detroit College of Law, graduating in 1964.

Around this time, Boesky had married Seema Silberstein, daughter of Detroit real estate developer Ben Silberstein, whose properties included the Beverly Hills Hotel. He worked under a federal judge in Detroit, a relative of Silberstein’s, but failed to land a job at one of the city’s largest law firms.

After his father’s death in 1964, Boesky took over the remaining Brass Rail bar, which then featured topless dancers, and renamed it The a-Go-Go Club, according to a 1993 Vanity Fair article. Two years the company later went bankrupt and Boesky moved to New York, where he began a new career on Wall Street.

After several years working at financial firms where he learned the trade 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 in play, he created a new fund, just in time for a wave of buyouts that changed the landscape of American business.

In 1984, Boesky earned more than $100 million from Texaco Inc.’s acquisition of Getty Oil Co. and Chevron Corp.’s purchase of Gulf Oil Co., according to a 1984 Atlantic magazine article. The following year, he earned about $50 million when Philip Morris Cos. acquired General Foods Corp.

Unlike other arbitrageurs who generally avoided publicity, Boesky embraced it. He hired a publicist to get him quoted in the media, wrote a 1985 book about his experiences in high finance called “Merger Mania” and traveled the country promoting it in speeches.

SEC probe

In the mid-1980s, Wall Street’s bull market, which allowed savvy investors to make millions, also led regulators to suspect that markets were rigged in favor of those with inside information.

In mid-1985, the Securities and Exchange Commission opened an investigation into suspicious trading by two Venezuela-based employees of Merrill Lynch & Co., which led them down a tangled path to cheating on Wall Street that took ensnared Dennis Levine, an investment banker at Drexel Burnham. Lambert inc.

A year later, in June 1986, shortly after being arrested on insider trading charges, Levine pleaded guilty and agreed to cooperate with Manhattan U.S. Attorney Rudy Giuliani. Levine told federal prosecutors that he provided Boesky with non-public information about potential deals. Accused of making approximately $12 million through illegal trading, Levine was later sentenced to two years in prison.

A few months later, Boesky reached a deal with the government. He would plead guilty to a charge of conspiracy to file false business records, pay $100 million in fines and cooperate with federal authorities.

As part of the deal, Boesky secretly recorded his conversations with traders to help the government build cases against other Wall Street figures. The most notable of these was Michael Milken, head of high-yield bond trading at Drexel Burnhan, who helped finance many of the company acquisitions of the era. Milken, who served nearly two years in prison for securities law violations, was pardoned in 2020 by then-President Donald Trump.

Boesky faced a maximum sentence of five years in prison, but based on his cooperation with authorities, he was sentenced to three years. In April 1990, after serving about two years, he was released.

In a letter to a federal judge in favor of reducing the sentence, prosecutors thanked the financier for helping them understand the extent of Wall Street’s abuses: “What Boesky has given the government is a window into the rampant criminal conduct that permeated the securities industry in the 1980s, to an extent unknown to this office before Boesky began cooperating.

Unlike Milken, who devoted much of his post-prison life to philanthropy, Boesky largely disappeared from public view after his release. In 1991, Seema Boesky filed for divorce, which was finalized two years later. The couple had four children: William, Marianne, Théodore and John. He then lived with his second wife, Ana.

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