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- December 22, 1986
- Vol. 26
- No. 25
It Wasn't Insight, but Inside Tips That Made Him the Demon of Wall Street
As it turns out, Boesky was not deciphering secrets but buying them: Shameless whispers from an ambitious insider gave Boesky advance knowledge of takeovers, a crucial and illegal edge in the marketplace. Now that he has been exposed and forced to pay a $50 million fine and to set aside $50 million for restitution, now that he will be banned, as of April 1988, from trading stocks in this country, peeking into the future may no longer hold the same appeal for the man who transformed a sleepy art into a financial high-wire act. Not when his own future might hold up to five years behind bars.
The unmasking of Ivan Boesky—a man who has come to symbolize unbounded avarice—has unsettled the financial community because no one knows who else may be under investigation. It has also led to some belated soul-searching about the ethics of Wall Street. In a commencement speech last year at the School of Business Administration at Berkeley, this is what Boesky had to say about greed: "I think greed is healthy. You can be greedy and still feel good about yourself."
Even at the end, when the Securities and Exchange Commission scuttled Boesky's operation, he still managed to cut himself a deal. It is widely believed that he agreed to record his phone conversations and thus implicate an unknown number of unscrupulous traders. He was allowed to unload an estimated $1.6 billion worth of stocks before the announcement of the government's charges against him could drive prices down.
Until November, Ivan F. Boesky was a glittering success. He had an ideal family—a handsome wife and four children—and lived in a $3.3 million mansion in New York's affluent Westchester County. He gave lavishly to charity; he supported both the Republican and Democratic establishments—in short, he appeared the perfect gentleman from sole to crown.
If there was an unresolved mystery about him, it was the quirky drive of someone who had wealth like water, yet who still lived as though he worked in a sweatshop. He slept a mere two hours a night. "The machine doesn't like to stop," he explained to an interviewer two years ago.
The son of a Russian immigrant delicatessen owner in Detroit, Boesky had a restless, floundering youth, dropping in and out of college, unable to land a satisfying job even after he graduated from the Detroit College of Law at 27. But he married well. Seema Silberstein was the daughter of real estate tycoon Ben Silberstein. Muriel Slatkin, Seema's sister, has said her father had a low opinion of Boesky, who he said had "the hide of a rhinoceros and the nerve of a burglar."
Even before Boesky's current problems, he and his sister-in-law were in the midst of a messy $200 million lawsuit over the management of the assets of the Beverly Hills Hotel, which had been given to the two Silberstein daughters by their father.
Boesky moved to New York in 1966 and with financing from his in-laws opened his investment company in 1975. He hired a publicist and advertised for investors, a practice then considered appropriate only for mass-marketing of low-rent accounts.
In 1984 Boesky is said to have earned about $65 million when Chevron swallowed Gulf and $50 million when Texaco bought Getty. Last year he reportedly made $50 million when Philip Morris acquired General Foods.
Behind Boesky's insatiable ambition lay a simple creed. One former associate remembers Boesky displaying a T-shirt that read: "He who owns the most when he dies wins."
It seems a fitting credo for a calculating man.
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