“ You can be greedy and still feel good about yourself “
–Ivan Boesky to graduating business majors at the University of California, Berkeley, 5/18/86
“ Greed, for lack of a better word, is good.”
–“Gordon Gekko” in the 1987 film Wall Street
Notorious American arbitrageur who pleaded guilty to egregious insider trading and was fined $100 million. He was sentenced to three years in prison in 1987. Listed under his middle name “Frederick” in Fribourg’s Directory of Public Companies (“Annuaire Suisse du Registre du commerce”), Boesky obtained a bogus Fribourg residency for himself, his wife, and his four children in 1983.
Boesky was at the center of the insider trading investigations that the U.S. Securities and Exchange Commission (SEC) undertook in the 1980’s. The rise in the number of mergers and acquisitions of corporations in the early 1980’s created an environment in which investors who were privy to “insider information” bought stock and options in target companies just before the official announcement that the companies would merge with or be acquired by another company. Since the price of the target company’s stock would rise after the announcement, the “insider traders” could reap substantial and illegal profits (under US law). Investors who played by the rules began to feel that the stock market was hopelessly rigged.