Ivan Boesky, Central Figure in Wall Street Scandal, Dies at 87

Ivan F. Boesky, the stock trader who cooperated with the government in exposing one of the largest insider trading scandals on Wall Street, has died at the age of 87. Boesky was once considered one of the wealthiest and most influential risk-takers on Wall Street, with a fortune estimated at over $200 million. However, after being implicated in insider trading, he cooperated with U.S. attorney Rudolph Giuliani in a bid for leniency, uncovering a scandal that tarnished the reputations of respected U.S. investment brokerages and affected the securities industry.Boesky secretly taped three conversations with Michael Milken, the so-called junk bond king whose work with Drexel Burnham Lambert revolutionized the credit markets. Milken eventually pleaded guilty to six felonies and served 22 months in prison, while Boesky paid a $100 million fine and spent 20 months in a minimum-security California prison beginning in March 1988.Boesky was an arbitrageur who made millions by betting on stocks thought to be the target of corporate takeovers. However, some of his tips came from within the mergers and acquisitions departments of Drexel Burnham Lambert Inc. and Kidder, Peabody & Co. Dennis Levine of Drexel and Martin Siegal of Kidder, Peabody fed Boesky confidential information in return for a promised cut of profits.Boesky's cooperation provided the government with extensive information about securities law violations since the legislative hearings that led to the 1933 and 1934 Securities Acts. His involvement led to convictions or guilty pleas in cases involving former stockbroker Boyd Jefferies, Siegel, four executives of Britain's Guinness PLC, takeover strategist Paul Bilzerian, stock speculator Salim Lewis, and others.The biggest fish was Milken, the pioneering financier who had transformed the capital markets in the 1970s with a new form of bond that allowed thousands of mid-sized companies to raise money. In the 1980s, those junk bonds were used to finance thousands of leveraged buyouts, making Milken a hated and feared figure on Wall Street. Milken eventually pleaded guilty to six securities violations.Three years after his release from a Brooklyn halfway house in April 1990, Boesky and his wife Seema divorced after 30 years of marriage. Claiming he had been left penniless after paying fines, restitution, and legal fees, he won $20 million in cash and $180,000 a year in alimony from her $100 million fortune. He also got a $2.5 million home in the La Jolla section of San Diego, where he lived with his boyhood friend, Houshang Wekili.

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