Feeling Good About Greed?
CHRIST AND NEIGHBOR
A few years ago a most successful American was invited to speak to a group of business school students. Among other things, 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 applauded. Apparently it was exactly what they wanted to hear. At the time the speaker was indeed feeling good about himself, and about greed. In a period of 10 years he had made a fortune of $200 million. In one year alone, 1984, he had made $115 million on two takeovers, the buyout of Getty Oil by Texaco and that of Gulf by Chevron. The amount of work involved was minimal, but don’t think it cost him nothing. He had expenses. He had to pay bribes to another successful financier, who was feeding him inside information.
The man had chutzpah. He wrote a book, Merger Mania, in which he assured us that, “There are no easy ways to make money in the security market…. There are no esoteric tricks that enable arbitragers to outwit the system.”
Eventually the law caught up to him and he was deprived of $50 million in illegal profits plus a fine of another $50 million. Assuming this money all came out of the $200 million, which is a doubtful assumption, he was still ahead by $100 million at a minimum, and probably a lot more than that. Unfortunately, he was also compelled to plead guilty to a criminal charge of “illegal inside trading,” but, wheeling and dealing to the end, he persuaded the government to allow him to pick the judge who would sentence him. This lily-white-collar crime calls for a maximum sentence of five years. On December 18, 1987, Judge Morris Lasker sentenced him to three years in the slammer. Maybe he’s not feeling so good about himself these days, but look at the bright side. He’ll have all that time to anticipate the fun he can have with the $100 million-plus he has left over.
The man is, of course, Ivan Boesky. And why have I raked over these depressing ashes? Several reasons: one, you thought that Wall Street crashed on October 19, 1987. I suggest the crash really started with the revelation of the Boesky story back in November 1986, a story that involved four other high rollers in major roles (the successful Yuppies Dennis Levine, Ira Sololow, Robert Wilkis, and David Brown) and led to the Securities and Exchange Commission investigations that incriminated and/or besmirched other prominent financiers such as Thomas Reed, Paul Thayer, and Foster Winans, as well as prestigious banking firms like First Boston.
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