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N0KFQ > TODAY 24.08.11 19:08l 55 Lines 2389 Bytes #999 (0) @ WW
BID : 11251_KB0WSA
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Subj: Today in History - Aug 24
Path: IZ3LSV<I0OJJ<VE3UIL<N0KFQ<KB0WSA
Sent: 110824/1745Z 11251@KB0WSA.MO.USA.NA BPQ1.0.4
Aug 24, 1982:
A Wall Street scheme is hatched
Martin Siegel meets Ivan Boesky at the Harvard Club in New York
City to discuss his mounting financial pressures. Arbitrageur
Boesky offered Siegel, a mergers-and-acquisitions executive at
Kidder, Peabody & Co., a job, but Siegel, who was looking for
some kind of consulting arrangement, declined. Boesky then
suggested that if Siegel would supply him with early inside
information on upcoming mergers there would be something in it
for him.
In January 1983, although little information had been exchanged,
Boesky sent a courier with a secret code and a briefcase
containing $150,000 in $100 bills to be delivered to Siegel at
the Plaza Hotel.
Over the next couple of years, Siegel passed inside information
to Boesky on several occasions. With Siegel's inside tips, Boesky
made $28 million dollars investing in Carnation stock before its
takeover. But his success began to fuel investigative inquiries
by both the press and the Securities and Exchange Commission.
Rumors that Siegel and Kidder, Peabody & Co. were involved in
illegal activities began floating around.
Despite the pressure, Siegel and Boesky met at a deli in January
1985, where Siegel demanded $400,000. This time, the cash
drop-off was made at a phone booth. Siegel, who was apprehensive
about his relationship with Boesky, decided to put an end to it
after he had received his money. Still, he continued to trade
inside information with other Wall Street executives.
In 1986, the illegal schemes, which by then included many of the
biggest traders in the country, came crashing down. Arrests were
made up and down Wall Street, and Boesky and Michael Milken, the
junk bond king charged with violating federal securities laws,
were no exception.
Siegel turned out to be one of the few cooperative witnesses for
the government and virtually the only one who showed remorse for
his role in the fraud, causing him to be ostracized on Wall
Street. Nevertheless, he did fare better than the others: Milken
received a 10-year sentence and Boesky received 3 years, but
Siegel was only required to return the $9 million he had obtained
illegally. The entire incident came to symbolize the era of
unfettered greed on Wall Street in the mid-1980s.
73, K.O. n0kfq
Another old retired guy
E-mail: n0kfq@winlink.org
N0KFQ@N0KFQ.#SWMO.MO.USA.NA
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