Ivan Boesky, who has died aged 87, was a Wall Street share dealer whose spectacular rise to fortune ended in a jail sentence for insider trading and whose dictum that “greed is all right” entered the folklore of the boom-time 1980s.
Boesky had a reputation in his heyday as a Midas of share arbitrage, taking stakes in undervalued companies he spotted as potential targets for takeovers, mergers or leveraged buy-outs fuelled by high-risk, high-yield “junk bond” issues – and selling his stakes as soon as their prices spiked.
He was reckoned to have made $65 million in oil company shares in 1984 when Chevron bought Gulf and Texaco bought Getty; and another $50 million in 1985 when the Philip Morris tobacco company bought General Foods.
Famously workaholic, sleeping less than three hours per night, constantly dealing on multiple telephone lines, he deployed a fund of some $3 billion – boosted by debt and including other investors’ money as well as his own – to build a fast-changing portfolio of holdings, many of which duly rocketed. At his zenith he was reckoned to be worth $280 million.
So high was his standing in the securities industry that he was appointed adjunct professor at two New York business schools and published a handbook of arbitrage techniques titled Merger Mania. And in May 1986 he was invited by the students of the Haas School of Business Administration at Berkeley in California to address their graduation ceremony.
“Greed is all right, by the way,” he told them, to laughter and applause. “I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself.”
Hubris awaited, however, as investigators began to look into the leveraged buy-out bonanza and in particular the activities of the investment bank Drexel Burnham Lambert, which led the high-yield bond market. Boesky was found to have been buying confidential information – often quite blatantly, for briefcases of cash – on forthcoming corporate deals from Drexel executives.
In September 1986 he struck a plea agreement with the US attorney’s office, whose chief prosecutor was the future New York mayor Rudy Giuliani, in which he admitted multiple incidences of insider trading but informed on other leading participants in the racket – notably Michael Milken, the “junk bond king” of Drexel Burnham.
Boesky was fined $100 million, permanently banned from working in securities markets and given a three-and-a-half year sentence of which he served 22 months in a relatively cushy Californian prison. Time magazine pictured him on its cover as “Ivan the Terrible”.
Meanwhile, the film-maker Oliver Stone used Boesky as a partial model for the character of the corporate raider Gordon Gekko played by Michael Douglas in Wall Street (1987). The film’s most famous scene has Gekko delivering a version of Boesky’s Berkeley address to a shareholder meeting of a struggling company, Teldar Paper, whose fate he controls: “Greed, for lack of a better word, is good. Greed is right. Greed works… And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA.”
The speech became the much-quoted epitaph of an era of unbridled, amoral money-making in financial markets in which Ivan Boesky was an iconic and formative player.
Ivan Frederick Boesky was born in Detroit on March 6 1937 to Russian immigrant parents; his father owned restaurants, delicatessens and a chain of “Brass Rail” bars featuring topless dancers.
After graduating from high school in Detroit – having excelled as a schoolboy only at wrestling – Ivan attended three universities without achieving an undergraduate degree but went on to graduate from Detroit College of Law. He worked as a law clerk and tax accountant before moving in 1966 to New York City, where he became an investment analyst for the firm of L F Rothschild. Other jobs followed before he founded his own brokerage business, with $700,000 of his wife’s money, in 1975.
In 1962 Boesky had married Seema, daughter of Ben Silberstein, a Detroit real estate magnate who also owned the Beverly Hills Hotel and who reportedly suspected Ivan of wooing Seema for her wealth, describing him as having “the hide of a rhinoceros and the nerve of a burglar”.
In their palmy days, Ivan and Seema acquired a grand 200-acre estate in New York’s Westchester County, previously owned by the founder of the Revlon cosmetics brand; they also kept homes in Palm Beach, Paris and the Riviera. They were benefactors of the Metropolitan Museum and the American Ballet Theater and gave $2 million to New York’s Jewish Theological Seminary for a new library, to which Ivan lent rare manuscripts from his personal collection.
After their divorce in 1991, Ivan Boesky secured an alimony income from Seema’s private fortune. In later life he lived quietly at La Jolla in California, embarking on rabbinical studies and doing charitable work for the homeless. He married secondly, in 2000, Ana Serrano, who survives him with their daughter and three sons and a daughter of the first marriage.
Ivan Boesky, born March 6 1937, died May 20 2024
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