"Money Was the Only Way"

Ivan Boesky's first uncomfortable nickname came from his wealthy in-laws, who referred to him as "Ivan the Bum" for his lack of direction. No ring to it, but some truth. The young Boesky had put in stints at three different colleges before finally earning a degree from Detroit College of Law. Later he drifted from job to job, working unhappily as a law clerk and then as an accountant. "My father always considered him a ne'er-do-well," claims his estranged sister-in-law. But once the restless 29-year-old Boesky arrived on Wall Street in 1966, he would never again be indifferent. He was taken with a specialized form of stock speculation called risk arbitrage. It was a sleepy game then, but Boesky learned to play it with such daring and ruthlessness that he horrified the old hands. Who was this scary overachiever, this Russian revolutionary in their midst? "Ivan the Terrible," they called him. )

Boesky (pronounced Bo-ski) was terribly good indeed, thanks to frantic 20-hour workdays, obsessive research and a natural trader's ability to talk on several telephones at once. It was as if he had stored up millions of kilocalories of energy during his aimless years and was now unleashing them on an unwary Wall Street. "Boesky did not really need to cheat," observes Corporate Raider T. Boone Pickens. And yet he did. His relentless drive to get an edge appears to have pushed him right over it. Boesky seemed to expect something like that might happen. "I can't predict my demise," he once said, "but I suspect it will occur abruptly."

His tragic story might be called "The Great Boesky." No amount of money seemed to convince him that he had finally arrived, even when his fortune reached $200 million or more. "He wanted so much to be accepted," says a friend, "and he thought money was the only way." Observes another: "He never realized that really making it means being at peace with yourself." Boesky has now suffered what he probably feared more than anything else: being portrayed as a fraudulent genius. "I always thought he was a rat," declares one investment banker. The disgrace kept welling up for Boesky last week. His book Merger Mania (subtitled Arbitrage: Wall Street's Best Kept Money-Making Secret), a scholarly tome he published last year in an effort to dignify his profession as a science, was abruptly dropped by its current publisher, Henry Holt & Co.

The arbitrager was born and reared in Detroit; his father was one of five Russian-immigrant brothers who operated a succession of popular delicatessens and restaurants in the city. Boesky was known from childhood for his intense desire to excel -- almost to the point of not knowing when to stop. Recalls Roger Boesky, a second cousin who attended the same prep school, Cranbrook, in suburban Detroit: "He had this capacity for single-mindedness. He drove himself mercilessly as far as exercise goes," performing hundreds of push-ups at a time.

During law school in 1962, Boesky married Seema Silberstein, the daughter of Ben Silberstein, a real estate tycoon. After Boesky had made several stabs at starting a career, the young couple decided to move to New York City, where Silberstein set them up in a Park Avenue apartment. Boesky found a calling at last on Wall Street, where he landed a job as a stock analyst at the L.F. Rothschild investment firm. In 1975, when Boesky started his first arbitrage firm with $700,000 in capital, the Silberstein fortune helped bankroll it.

Boesky seemed determined to become richer than his father-in-law. His zealousness shocked the arbitrage business, which had been accustomed to small, cautious investments. Boesky frequently bet the ranch, sometimes tens of millions of dollars, on single takeover bids. His gambles usually succeeded, which he attributed to an unheard-of emphasis on doing his homework. He got plenty of help from an army of 100 bustling employees. Once established, Boesky sought to become the goodwill ambassador of the arbitrage trade. Yet he tended to make an uneasy impression with his smile, flashing a set of gleaming teeth at the oddest moments without any hint of mirth.

Boesky works like a machine and claims to sleep only two or three hours a night. He rises at 4:30 each morning and climbs into his chauffeured limousine with IFB-initialed license plates. At work in a vast, white marble suite of offices above Manhattan's Fifth Avenue, Boesky stands behind his desk and punches buttons on a 300-line telephone console as he studies flickering stock-market figures on a battery of video screens. Almost always clad in a dark three-piece suit, with the vest adorned by a gold watch chain, he continuously slurps coffee and information, the two fuels he seems to crave most.

Last week Boesky, who has three sons and a daughter, spent much of his time folding up ambitious personal and social commitments he has made. He scrapped a grand plan to remodel the family's ten-bedroom house, situated on 200 acres of land in New York's Westchester County, to look like Jefferson's Monticello. Far more painful, no doubt, was his decision to withdraw from the many prominent positions that had given him a measure of social status, including his posts as a trustee of the American Ballet Theater and finance director for the National Jewish Coalition. He canceled a $1.5 million grant to Princeton University, which a son attends. Boesky had often given lavishly to charities but irritated some fund raisers with his hard bargaining for control and recognition. "There are givers and users. He is a user," claims one.

Boesky and his wife took pride in their controlling interest in the Beverly Hills Hotel, though it was won in a bitter family struggle. Boesky's father-in-law had bought the hotel in the early 1950s and left 48% ownership to each of his daughters, Seema and her sister Muriel Slatkin. Muriel and Husband Burton ran the hotel until 1980, when the Boeskys managed to buy the remaining 4% stake from another relative.

Wielding a majority share of 52%, Boesky installed a new manager and revoked many of the Slatkins' hotel privileges, reportedly including his sister-in- law's use of a poolside cabana and a private table in the Polo Lounge. Last spring the Slatkins filed a lawsuit in Los Angeles federal court, charging that Boesky lost $14 million of the hotel's money in arbitrage deals, among other abuses. "He is the most avaricious, arrogant piece of sewage I've ever met," his sister-in-law says. "We hate each other." This week the hotel will go on the auction block, at a starting price of $100 million. For the Boeskys in particular, the money may come in handy.