How Ivan Boesky became one of the most infamous figures on Wall Street and the inspiration for Gordon Gekko

By Lukas I. Alpert

The trader who was brought down in an insider-trading scandal died Monday at the age of 87.

There are few figures who typified Wall Street excess more than Ivan Boesky.

A bold, brash trader and financier who made millions betting on tips gathered through insider trading, Boesky would go to prison in a scandal so brazen that he became the inspiration for the character of Gordon Gekko in the seminal film "Wall Street."

Boesky's 1986 guilty plea to insider trading, accompanied by a then-record $100 million fine, brought to a close a period of roaring 1980s exorbitance on Wall Street and beyond that became the calling card of the so-called Me Generation.

Boesky died Monday at the age of 87.

It was Boesky's words that served as the inspiration for the famous "greed is good" speech delivered by the character played by Michael Douglas in 1987's "Wall Street."

A year earlier, Boesky, speaking at the graduation ceremony for the Haas School of Business at University of California, Berkeley, told students: "I think greed is healthy. You can be greedy and still feel good about yourself."

In the film, the line - delivered at a shareholder meeting of the fictional Teldar Paper - was rendered as: "The point is, ladies and gentlemen, that greed, for lack of a better word, is good, Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit."

Boesky made his fortune as an arbitrage trader, making big bets primarily on tender offers, corporate takeovers and mergers. But he gleaned much of his information through illegal tips, sometimes gathered by handing over briefcases full of cash and other payoffs.

It was a time when the stock market soared to dizzying heights, just before the devastating crash of 1987.

Boesky's rapid success - he was worth an estimated $200 million, or nearly $600 million in today's dollars, when he was taken down - eventually attracted the attention of federal regulators and prosecutors, led by an ambitious then-U.S. attorney named Rudolph Giuliani.

With prosecutors breathing down his neck, Boesky agreed to cooperate and plead guilty. With his help, prosecutors were also able to take down investment firm Drexel Burnham Lambert and its famed junk-bond king, Michael Milken.

Boesky claimed he slept only a few hours a night and focused his energies on gathering information. His office was filled with computer terminals, television screens, dozens of phone lines and stock tickers at a time when computerized data services and trading platforms were beginning to take hold on Wall Street.

The son of a Detroit deli owner, Boesky, at the height of his fame, was one of the richest and most swashbuckling characters on Wall Street. He wore designer suits, owned lavish homes all over the world and traveled by private jet and helicopter.

Many around Boesky, however, came to view him as a sinister figure.

When John Mulheren Jr., one of Boesky's protégés, feared he himself was about to be implicated in the scandal, he loaded an assault rifle with the intent of killing Boesky and Boesky's former head trader, police said, but was stopped en route.

At Mulheren's trial, his attorney, Thomas Puccio, called Boesky a "pile of human garbage" who was motivated to say anything to fulfill his promise to assist federal authorities in exchange for leniency.

"If there ever was a person to whom the title Prince of Darkness could be applied, Ivan Boesky is that man," Puccio said. "The king of greed, a person who stood for nothing except his own ambition, his own greed."

After his guilty plea, Boesky was sentenced to three years in federal prison, of which he served two.

Those around him would later say they never understood why Boesky engaged in such blatant insider trading, because he was very rich and was very skilled at trading on his own.

After his release, Boesky relocated to La Jolla, Calif., where he lived quietly.

-Lukas I. Alpert

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05-20-24 1612ET

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