(JTA) — Ivan Boesky, a financier whose role in an illegal insider trading scheme in the go-go 1980s sent shockwaves through a Jewish community to which he had been a generous donor, died Monday. He was 87.
Prior to his indictment in 1987 on a federal charge of conspiring to “make false, fictitious and fraudulent statements” to the federal government, Boesky was a high-profile member of the Jewish philanthropic community in New York and had been a member of the board of the Jewish Theological Seminary and president of the JTS library corporation.
The head of an arbitrage business that wagered on companies Boesky thought might be takeover targets, he pleaded guilty in April that year to a single conspiracy charge after agreeing to cooperate with the federal investigation of illegal insider trading and to wear a wire in conversations with senior investment figures. Boesky’s role in the illegal insider trading was revealed in November 1986.
Boesky’s fall was doubling shocking to the Jewish community. Stories of Boesky’s and other financiers’ excesses — he famously arrived in a helicopter to a lavish bar mitzvah held on the Queen Elizabeth 2, which had been rented for the occasion by a real estate developer — fed stereotypes of Jewish avarice, leading commentators and rabbis to emphasize that the arbitrageurs represented only themselves.
At the same time, his misdeeds — and that of one of Boesky’s closest allies, the “junk bond” financier Michael Milken, who would also end up in prison — forced a reckoning within a Jewish community to which Boesky had given millions. It led to an anguished debate among institutions over accepting money from philanthropists of questionable character or who were in legal jeopardy.
In May 1987, the New York Jewish Week ran a special symposium on ”the crisis in Jewish ethics” pegged to the Wall Street scandals. ”You have to make a choice —whether to be ruled by the values that are current in the world or whether to live your life according to values which come from your tradition, from your law, from your faith,” Marc Gellman, then rabbi of Temple Beth Torah, a Long Island synagogue, was quoted as saying.
That year the New York chapter of the American Jewish Committee also announced a pubic conference on business ethics and the Jewish tradition.
The day before the Security and Exchange Commission announced it was fining Boesky a record $100 million, he informed JTS that he was resigning from the two positions. He withdrew his name and that of his wife, Seema, from the library, for which he had reportedly pledged $2 million.
Boesky also resigned from the boards of UJA-Federation of New York, Yeshiva University and the U.S. Holocaust Memorial Council. He was a member of the UJA-Federation’s council of overseers and campaign leadership, and had twice chaired the UJA-Federation joint campaign.
In addition, Boesky served as special adviser on Jewish affairs to what was then called the Republican National Jewish Coalition. He also withdrew a pledge of $750,000 for the planned Center for Jewish Life at Princeton University.
He served 18 months of a three-year sentence in prison, followed by four months at a Brooklyn halfway house. He reportedly studied Talmud in prison, and there was talk for a time that he would enroll as a student at JTS once he was released. Instead, following his divorce from his first wife, he remarried and settled in La Jolla, California, where he “lived quietly,” according to the New York Times.
Boesky was the son of a Russian Jewish immigrant who owned a chain of delicatessens in Detroit. He was a child entrepreneur by the age of 13, when he drove an ice cream truck around Detroit without a driver’s license.
In the early 1970s, while with the arbitrage department of Edwards and Hanly in New York, Boesky had another skirmish with the SEC, which fined him $10,000 and censured him for violating a securities trading regulation.
Boesky’s reputation was burnished — or tarnished, depending on one’s point of view — when he was said to have inspired the character of an avaricious corporate raider, Gordon Gekko, in Oliver Stone’s 1987 film “Wall Street.” Gekko’s tag line, “Greed is good,” was reportedly inspired by a 1986 speech Boesky gave to business school students, in which he said, “Greed is all right, by the way…. I think greed is healthy. You can be greedy and still feel good about yourself.”
The students cheered, and while Stone intended Wall Street as a cautionary tale, Gekko became something of a folk hero. Stone has said that he has been approached over the years by people who said they became stockbrokers because of the film.
Boesky is survived by a daughter and three sons from his first marriage to Seema Boesky, as well as by his wife Ana Boesky and their daughter.
