Ivan Boesky, stock trader convicted in insider trading scandal, dead at 87

Ivan F. Boesky, the flamboyant stock trader whose cooperation with the government cracked open one of the largest insider trading scandals in the history of Wall Street, has died at the age of 87.

A representative at the Marianne Boesky Gallery, owned by Ivan Boesky's daughter, confirmed his death. No other details were given.

The son of a Detroit delicatessen owner, Boesky was once considered one of the richest and most influential risk-takers on Wall Street. He had parlayed $700,000 from his late mother-in-law's estate into a fortune estimated at more than $200 million, hurtling him into the ranks of Forbes magazine's list of the 400 richest Americans.

Once implicated in insider trading, Boesky cooperated with a brash young U.S. attorney named Rudolph Giuliani in a bid for leniency, uncovering a scandal that shattered promising careers, blemished some of the most respected U.S. investment brokerages and injected a certain paranoia into the securities industry.

Working undercover, Boesky secretly taped three conversations with Michael Milken, the so-called "junk bond king" whose work with Drexel Burnham Lambert had revolutionized the credit markets. Milken eventually pleaded guilty to six felonies and served 22 months in prison, while Boesky paid a $100 million fine and spent 20 months in a minimum-security California prison nicknamed "Club Fed," beginning in March 1988.

While he usually worked 18-hour days, the silver-haired and lean Boesky also lived a life of opulence. He wore designer clothes, traveled in limousines, private airplanes and helicopters and revamped his 10,000-square-foot Westchester County mansion with a Jeffersonian dome to resemble Monticello.

"There was a very substantial amount of materiality available," Boesky said during his 1993 divorce proceedings.

"We had places in Palm Beach, Paris, New York, the south of France."

Boesky was an arbitrageur, a risk-taker who made millions by betting on stocks thought to be the target of corporate takeovers. But some of his tips came from within the mergers and acquisitions departments of Drexel Burnham Lambert Inc. and Kidder, Peabody & Co.

Dennis Levine of Drexel and Martin Siegal of Kidder, Peabody fed Boesky confidential information in return for promised cut of profits of either 1% or 5%.

Ivan Frederick Boesky was born in Detroit in 1937 into a family of Russian Jewish immigrants.

Boesky said he learned industriousness from his father, who operated three delicatessens.

At the age of 13 Boesky bought a 1937 Chevy truck, painted it white and sold ice cream from it in Detroit parks, making about $150 a week in nickels and dimes.

A three-time college dropout, Boesky entered the Detroit College of Law in 1959, which then did not require an undergraduate degree for admission.

He withdrew twice before receiving his degree five years later.

While in law school Boesky married Seema Silberstein, the daughter of Ben Silberstein, a real estate developer and the owner of the Beverly Hills Hotel.

Unable to find employment with any major Detroit law firm, Boesky moved in 1966 with his wife and the first of their four children to New York, where he floated from job to job on Wall Street.

In 1975 Boesky struck out on his own, opening small brokerage that he eventually parlayed into a sprawling group of investment companies with more than 100 employees. He worked grueling hours, gave self-promoting newspapers interviews and wrote a 1985 book entitled "Merger Mania."

He was also an active philanthropist, especially with Jewish causes, giving $20 million to endow a library at the Jewish Theological Seminary that was later renamed.