Ivan Frederick Boesky (born March 6, 1937) is a former American stock trader….who became infamous for his prominent role in an insider trading scandal that occurred in the United States during the mid-1980’s. During 1975, he initiated his own stock brokerage company….Ivan F. Boesky & Company….with $700,000 (equivalent to $3.2 million in 2017) worth of start money from his wife’s family….with a business plan that speculated on corporate takeovers…..as Boesky’s company grew from profits as well as buy-in investments from new partnerships. By 1986, Boesky had become an arbitrageur who had amassed a fortune of more than US$200 million by betting on corporate takeovers….and the $136 million in proceeds from the sale of The Beverly Hills Hotel…..when he appeared on the cover of Time magazine December 1, 1986.
During 1987, a group of partners sued Boesky over what they claimed were misleading partnership documents…..whereby the U.S. Securities and Exchange Commission investigated him for making investments based on information received from corporate officers….in which these stock acquisitions were sometimes brazen….with massive purchases occurring only a few days before a corporation had announced a takeover. Although insider trading of this kind was illegal at the time….the laws prohibiting it were rarely enforced until Boesky was prosecuted….when Boesky cooperated with the SEC while informing on others….including the case against financier Michael Milken….and as a result of a plea bargain….Boesky received a prison sentence of 31⁄2 years….and was fined US$100 million. Although he was released after two years….he was permanently prohibited from working with securities.
After his release from prison….Boesky was unable to rehabilitate his reputation….while paying hundreds of millions of dollars as fines and compensation for his Guinness share-trading fraud role and a number of separate insider-dealing scams.
