Exchange bans Boesky

Press, 6 January 1987, Page 24

Exchange bans Boesky

By

MICHAEL GILLARD

in New York One month almost to the hour after the Securities and Exchange Commission stunned Wall Street by imposing a SUSIOO million penalty on Ivan Boesky for insider trading, the former king of the arbitrageurs has been banned by the New York Stock Exchange. The exchange suspended Boesky from association with any member firm and from any direct electronic access to its trading floor. Under the deal with the S.E.C., Boesky is able to continue trading until April, 1988. He will still be able to trade on Wall Street, but only through

firms outside the New York Stock Exchange. He may now need to resign from those securities companies he controls. Boesky broke a near month-long silence with a three-sentence statement criticising the New York Stock Exchange action as “precipitous” and “unwarranted.” The exchange’s actions came after persistent rumours in New York that Boesky’s main company intended to cease trading imminently, while in Washington both the New York Stock Exchange and the S.E.C., chaired by Mr John Shad, have been criticised for needing an anonymous tip from far away Venezuela and the assistance of indicted in-

sider dealer, Dennis Levine, to uncover “Ivan the Terrible’s” iceberg of illicit deals. The New York Stock Exchange admitted that since 1983 it had investigated 47 suspect dealing situations involving Boesky, 25 of which it had passed on to the S.E.C.

The Stock Exchange action also confirmed evidence given by the S.E.C. to a Congressional committee that Boesky has liquidated the vast majority of the investment fund of more than SUS2 billion.

Explaining its decision, the New York Stock Exchange disclosed that it had been informed by the S.E.C. that Ivan F. Boesky and Co. LP would be liquidated “in several weeks.”

Boesky’s Washington lawyer, Harvey Pitt, said he expected the investors in the limited partnership, who put up S22OM last March, to “come out in reasonably fine shape.” * S.E.C. testimony to the House committee on energy and commerce indicated that since possibly as early as July, when Drexel Bumham Lambert, investment banker Levine first revealed Boesky as a customer for his inside information, the limited partnership had sold shares and other investments worth perhaps $1.4 billion. Only S22OM in debt may remain to be repaid through share ’ sales by Ivan F. Boesky and Co. LP. — Copyright, the “Observer,” London.