IN AUGUST 1982, Chief Executive Officer Bill Agee, his wife and former strategy adviser Mary Cunningham at his side, attempted to consolidate the Detroit-based manufacturer's position in the aerospace industry through a takeover of Martin Marietta. While Marietta undertook the largest ever “PacMan defense”(trying to buy Bendix first) the company's lead strategist, Martin Siegel of investment firm Kidder Peabody, illegally leaked the details to arbitrageur Ivan Boesky, who made a quick $120,000 on Bendix stock. When the dust settled, Bendix was a subsidiary of a third firm, Allied Corporation; Martin Marietta had regained independence at the price of selling assets; and Boesky had cemented an insider-trading relationship with Siegel that would lead to Siegel's arrest in 1986.

Before resigning as vice president of strategic planning due ...

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