Ivan Boesky (March 6, 1937, Detroit, Michigan) former American stock trader amassed a fortune of more than US$200 million by betting on corporate takeovers and placed on the Forbes 400 wealthiest American list Boesky was the face of “greed is good” (until he went to prison).

He personified the mid-1980s culture on Wall Street and he inspired Oliver Stone’s Wall Street where the leading character in the film was Gordon Gekko, who was the perfect hero/villain for the decade of greed.

Ivan Boesky also reserved his place in history by making it on the cover of Time magazine December 1, 1986.

Boesky parents were Russian Jewish immigrants. His father was a Detroit restaurateur who owned delicatessens, restaurants, and bars.

Ivan Boesky attended Detroit’s Mumford High School. He then followed courses at Wayne State University, Eastern Michigan University and the University of Michigan.

In 1962, he married Seema Silberstein, the daughter of a Detroit real estate magnate.

He was then admitted to Detroit College of Law (even though he didn’t have an undergraduate degree) and graduated in 1965.

Ten years later (1975) with $700,000 from his wealthy wife’s family, Boesky launched his own arbitrage fund called Ivan Boesky and Company.

Ivan Boesky would soon amount a fortune. He would take home a fat 50% (management fees are typically 20%) of the profits and his net worth would exceed $280 million.

During the 1980s, Boesky also served as an Adjunct Professor at Columbia University’s Graduate School of Business and at New York University’s Graduate School of Business.

Ivan Boesky’s love of money, the highlife and a desire to flaunt his wealth was obvious. He would be chauffeured to work in his limousine with his initials, IFB, on the license plate. He would frequent the most expensive restaurants in New York, ordered every single entrèe on the menu and only barely taste each item.

But Ivan Boesky would succumb to excessive greed and the temptation to satisfy a hedonistic lifestyle. He too would cheat, get busted and go to prison.

The U.S. Securities and Exchange Commission would investigate Boesky large stock purchases just days before a corporate takeover, they would uncover dirt and charge him with insider dealing.

In 1987 Ivan Boesky was sentenced to 3 years in jail for an insider dealing, ordered by the court to pay $250,000 fine and banned for life working in the securities business.

Ivan Boesky would be released after two years on good behavior but he would never get his life back on track and he would disappear into obscurity.

Boesky’s involvement in white collar criminal activities is recounted by the book Den of Thieves by James B. Stewart.

Ivan Boesky amassed a fortune of more than US$200 million by betting on corporate takeovers and placed on the Forbes 400 wealthiest American list.

Boesky was the face of “greed is good” (until he went to prison)

INVESTMENT STYLE

Ivan Boesky would identify target companies that were most likely going to be acquired. He would then purchase stock before the deal was made public and the stock price soared to the acquisition price.

This type of trade is completely legal, as long as all of the information has been made public. But, Boesky wanted an edge, so he cheated and traded on exclusive, inside information.

It is estimated that Ivan Boesky made $65 million in 1984 when Chevron purchased Gulf and when Getty was purchased by Texaco.

He also made about $50 million in 1985 when Philip Morris acquired General Foods.

Ivan Boesky was at the epicenter of the hostile takeover/leveraged buyout/junk bond bonanza of the 80s.

I think greed is healthy. You can be greedy and still feel good about yourself – Ivan Boesky

LEARNING RESOURCES

Ivan Boesky wrote a book entitled, “Merger Mania: Arbitrage: Wall Street’s Best Kept Money-Making Secret” (May 1985) where he explains the rules and strategies of betting on the outcome of corporate takeovers strategies that have earned him more than two-hundred-million dollars.

Ivan Boesky Merger Mania

What good is the moon? You can’t buy it or sell it – Ivan Boesky

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TRADING SOFTWARE

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A year later and the activist investor Dan Loeb targets Sony

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