“Greed, for lack of a better word, is good.
Greed is right. Greed works. Greed drives, finds paths and also captures the essence of the evolutionary spirit. Greed in all its forms drives life, money, love, knowledge and has determined the evolution of humanity. And greed, think about it, will not only save this company, but the other sick company called North America.”
This is what Gordon Gekko, the main character of the film, said when he was at the peak of his power. Wall Streetwhich won Michael Douglas the Best Actor Oscar in 1988.
But neither Gekko nor his words were, in fact, pure fiction.
This character was largely inspired by Ivan F. Boesky, an aggressive stockbroker who embodied the greed that prevailed in the 80s on the Wall Street stock market, where he became the highest-paid agent before falling from grace by starring in the biggest scandal for illicit operations carried out with privileged information that was known until then.
Boesky, who died on May 20 at the age of 87, had also given a memorable speech in which he defended greed.
“Greed is all very well, by the way. I think greed is healthy. “You can be greedy and still feel good about yourself,” Boesky said during the graduation ceremony for students at the University of California, Berkeley Business School in 1986.
Shortly after, it would be greed that would put him behind bars.
Betting big
Like Gordon Gekko, Boesky succeeded on Wall Street in an era marked by purchases and mergers of large companies.
With an aggressive style, Boesky shook up a financial sector that used to be very conservative and in which normally interested parties used to make small investments in shares of companies whose possible purchase had already been announced, in the hope that their price would then rise.
Boesky, on the other hand, tried to identify these companies before the purchase or merger offers were announced and made million-dollar acquisitions of shares.
Many of these operations were done with other people’s money, although when it came to distributing the profits (he took 40%) or the losses (he took 10%) he always made sure to be on the most favored side.
Thus he managed to consolidate an investment portfolio valued at around US$3,000 million and accumulate a personal fortune of US$280 million, according to figures published by The New York Times.
In 1985, Forbes magazine placed him on its list of the 400 richest people in the United States with an estimated fortune of US$150 million (about US$425 million in 2024).
Among his most successful operations was the one he carried out regarding the acquisition by Chevron of the oil company Gulf. Occurring in 1984, it was the largest merger of the time and provided Boesky with profits of US$65 million.
The following year he participated in the acquisition by the tobacco company Philip Morris of the General Foods Corporation for an amount of US$5.8 billion. At that time, it was the highest value merger outside the oil sector and with it Boesky earned about US$50 million.
Other notable operations were Texaco’s purchase of the oil company Getty Oil; the merger between the Nabisco Brands company and the tobacco company RJ Reynolds; or the restructuring of the chemical company Union Carbide.
In some of these fruitful plays, however, Boesky had some illegal advantages.
An icon of the “yuppie” era
Boesky was known on Wall Street by two nicknames: Piggy (greedy) and Ivan the Terrible.
And he certainly seemed to fulfill some of the clichés that used to surround the “yuppies” of the 1980s.
He said he got up at 4:30 in the morning, after about two or three hours of sleep, to exercise before leaving in his limousine to his office in Manhattan.
There he spent almost the entire day standing, consuming coffee, almost without eating and following the stock market information that was arriving through numerous terminals and news cables, as well as controlling 160 telephone lines and a group of screens that allowed him to see and listen to what their employees were doing.
Outside of work, he liked to be noticed and did not save on luxurious expenses.
It is said, for example, that in restaurants he used to order all the dishes on the menu, but after trying them he would eat one and leave the rest.
It is also said that in 1986 he was invited to what was then one of the most luxurious parties ever held in New York and that it took place aboard the Queen Elizabeth 2 cruise ship, which had been chartered for almost US$1 million (about US $4 million today) by a businessman to celebrate his son’s birthday.
Not being able to reach the port in time, Boesky flew by helicopter to the ship when it had already set sail and made a movie entrance by getting off the aircraft dressed in strict dress.
He liked to brag about his success.
He is said to have been the first Wall Street trader to hire a firm to handle his public relations, and in 1985 he published a book called “Merger Mania” in which he boasted of his skills in identifying companies that could be object of acquisitions.
Insider information
But it was not precisely his sense of smell and his skills that helped him accumulate his wealth.
After a million-dollar investment that went wrong, with the massive purchase in 1982 of shares in the oil company Cities Service -predecessor of the Venezuelan company Citgo-, Boesky was left on the brink of ruin.
To avoid bankruptcy, he designed a corrupt scheme to buy privileged information that would allow him to always “get it right” in his stock market investments.
One of his main partners was Martin Siegel, who worked at the investment bank Kidder, Peabody & Company.
Through a courier, Boesky sent Siegel briefcases with hundreds of thousands of dollars in cash that were delivered to the lobby of the Plaza New York hotel. In exchange, Siegel provided him with inside information about mergers or acquisitions that were being prepared.
It is estimated that Boesky gave Siegel more than $750,000 in various transactions.
The fall
But Boesky’s fall would not be caused by Siegel but by a smaller fish.
In May 1986, US authorities charged Dennis Levine, who worked at the investment bank Drexel Burnham Lambert, with insider trading.
During the investigation, they found that he had Boesky’s name written down among his notes. He was one of the buyers of that inside information.
On September 17, 1986, Boesky surrendered to federal authorities, with whom he agreed to collaborate to help them catch Michael Milken, who was known as the “junk bond king” due to his role in the development of the bond market. high-yield bonds (those that have a high risk of default and, therefore, must pay high yields).
Milken also worked at Drexel Burnham Lambert and had a close relationship with Boesky, to whom he provided much of the capital that Boesky invested in his operations, as well as inside information.
In his agreement with authorities, Boesky agreed to wear a hidden microphone to record his conversations with Milken, as well as others involved in this corrupt scheme.
Thanks to that collaboration, Boesky was able to reach an agreement with the authorities to plead guilty to operating with inside information and agreed to pay a fine of US$100 million.
In December 1987, he was sentenced to 3 years in prison, of which he served almost two before regaining his freedom.
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