Boesky, Ivan (1937–)

IVAN BOESKY IS a first generation American. His father, William, immigrated to the United States from Russia in 1912. The elder Boesky owned several nightclubs in the Detroit, Michigan, area. Stripping and topless dancing were introduced to increase their profitability. This drive for maximum profits and dedication to hard work would be a driving force for Ivan throughout his life.

Boesky, with the work ethic instilled in him by his father, sold ice cream from the back of a truck. He was repeatedly arrested for breaking the conditions of his license, which stated his curfew was 7:00 P.M. Ivan attend Cranbrook, a college preparatory school in the suburbs of Detroit. Academically, he was average. He did, however, distinguish himself as a superior wrestler, winning his school's award as the most outstanding wrestler. After his sophomore year, he transferred to Munford High in Detroit's inner-city.

Boesky, attended several institutions of higher education, Wayne State, Eastern Michigan College and University of Michigan, but he never graduated. After spending a few years in Iran, where he admitted he worked for the CIA, Boesky enrolled in the Detroit College of Law. The less than prestigious law school did not require a degree for admittance. Upon his graduation in 1964, he was rejected by every law firm in the Detroit area to which he applied.

Boesky met his future wife, Seema Silberstein, in 1960. Her father was a successful real estate developer in the Detroit area. They were married and Boesky's first job was serving as a clerk for a federal district court judge who was a relative of Seema. Soon after, a former Cranbrook prep school classmate introduced Boesky to the term merger arbitrage.

In its basic form, merger arbitrage deals with investing in potential take-over targets, and then realizing the profits when the merger is completed. This seemed to intrigue Boesky and he soon had his [Page 97]sights set on the world of high risk and high reward that could only by found in New York City.

Ben Silberstein, Boesky's father-in-law, set-up Boesky and his wife in a luxurious apartment on New York's Park Avenue. He quickly secured employment in a trainee position at L.F. Rothschild. After a year he headed to First Manhattan where he got his first experience in arbitrage. Soon after, he took a position at Kalb Voohis. After he lost $20,000 in a position, he was subsequently dismissed.

Boesky was not deterred by his dismissal. He soon landed a position with Edwards & Hanly. He quickly used maximum leverage and $1 million positions and actually influenced individual stock prices. Boesky trading tactics caught the eye of the Securities and Exchange Commission (SEC). He received a $10,000 fine from the SEC for shorting stock improperly. In 1975, these questionable and aggressive actions bankrupted Edwards & Hanly.