Ivan Boesky: The Wall Street Legend Who Crashed and Burned (with Rory Scovel)

Rory Scovel is a man of opulence. But he won't let greed go to his head like the subject of today's SNAFU. Ed and Rory discuss a modern Wall Street legend: the story of Ivan Boesky, a wall street trader who turned Arbitrage into front page headlines, until it all came crashing down. Subscribe to the SNAFU YouTube channel: www.youtube.com/@SNAFUPod Buy the SNAFU book: www.snafu-book.com http://www.snafu-book.com/ See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

• 0:00Speaker 00

  It's very seldom I run into someone who I really think is just kind of a piece of shit. I go, for the most part, everybody's just at their job, whether they're wildly famous or not, and they're just trying to do the job and then go home and hang out with their family. It's just kind of our universal situation. Well, you know what that means, Rory? That means you're the piece of shit.

• 0:27Speaker 00

  Oh my God, shit.

• 0:37Speaker 01

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• 3:07Speaker 05

  Hello and welcome to Snafu, your favorite podcast about history's greatest screw-ups, or, if we're being completely honest, a show about the spectacular hubris of humanity, the epic disasters it creates, and the lessons we like to pretend we can learn from them. I'm your host, Ed Helms, and my guest today is a very funny comedian, actor, writer, and podcast host. He released his first comedy album, Dilation, in 2011, and pumped out not one, not three, but six different stand-up specials. The most recent of which, Religion, Sex, and A Few Things In Between, you can find on HBO Max. He's appeared in a variety of film

• 3:52Speaker 05

  and television programs with a particularly standout performance, Opposite Rose Byrne in Apple TV's Physical, which... Is a fucking awesome show, by the way.

• 4:04Speaker 00

  Nice.

• 4:05Speaker 05

  Yes, indeed. And he's set to appear in a new ABC show called Do You Want Kids? And I think I also just saw a trailer that had you in it for my buddy Steve Carell's new show, Rooster.

• 4:18Speaker 00

  That's right.

• 4:19Speaker 05

  So please welcome to the pod, the amazing Rory Scoville.

• 4:24Speaker 00

  Um, thank you very much for having me. I, uh, I've got to say, Ed, I have waited to see you face to face because this was the only way to tell you this, uh, but Vacation is potentially one of the funniest movies that I have seen in, I do not, I don't know how long, but I have not seen a comedy where literally every five minutes, I sort of need to pause the movie to collect myself. And I have shown so many people that movie and I tell them, you will cry laughing. And it's so true. I loved that movie so much.

• 5:04Speaker 05

  You are this, you're gonna make me cry right now. You're really touching me and I'll tell you why, because I and the writer-directors of that movie have long felt that that movie, like, we are so proud of it. It is, it's a movie we loved making, we love the product, and it just didn't capture the audience that we, that we hoped for. And so when I get these little nuggets of affirmation like that, I really appreciate it. That really means a lot.

• 5:33Speaker 00

  You guys should absolutely be proud of it, but just given the fact that it's not comedically predictable, it's not hacky, it's not like the cringey comedy that you can find out there, which is fine. The fact that it actually is just so, moments of, that car is so stupid.

• 5:48Speaker 05

  The car is so funny. There's a key fob with a million buttons on it and Christina Applegate goes, is that a swastika? And I just say, yeah, we won't use that.

• 6:00Speaker 05

  What is that? What?

• 6:03Speaker 00

  It's great.

• 6:04Speaker 05

  All right, well, enough about me. We're here to talk about you. First of all, I've, I've actually known you a long time. Not well, we've, we've bumped into each other over the years. But I have a very borderline offensive question for you, which is, do you say your last name Scovel or Scoville?

• 6:24Speaker 00

  I say Scoville, which I'm gonna go and say is correct.

• 6:28Speaker 05

  That's my

• 6:29Speaker 00

  So many versions of it.

• 6:31Speaker 05

  Right.

• 6:33Speaker 05

  Scovel.

• 6:34Speaker 00

  Yeah.

• 6:34Speaker 05

  Scovel. Scovel.

• 6:36Speaker 00

  Scovel.

• 6:36Speaker 05

  Scovel. Scovel. Good, cuz I am southern, so I have all these little like contractions. I say, I say things like, like, like my friend Eleanor, I say Eleanor.

• 6:48Speaker 00

  Yes.

• 6:48Speaker 05

  And Scoville.

• 6:49Speaker 00

  Yeah.

• 6:50Speaker 05

  And that sort of thing. So I, but I'm always conscious that I'm probably doing it wrong as well. Where are you from originally?

• 6:56Speaker 00

  The South, from South Carolina, Greenville.

• 6:59Speaker 05

  Oh, right on.

• 7:00Speaker 00

  Eleanor is exactly right.

• 7:01Speaker 05

  Even though it's spelled with an O.

• 7:03Speaker 00

  Yep.

• 7:03Speaker 05

  It's pronounced with an I, or even an apostrophe, an apostrophe R.

• 7:07Speaker 00

  Eleanor.

• 7:08Speaker 05

  Yeah, Eleanor.

• 7:09Speaker 00

  Yeah, that R comes in quick.

• 7:11Speaker 05

  You're rapidly becoming an American treasure and

• 7:16Speaker 05

  I, I love to see it.

• 7:17Speaker 00

  This is the best podcast I've ever been on. We should just do this.

• 7:19Speaker 05

  This is called Butter Us Up. We just, we just compliment each other.

• 7:24Speaker 00

  The Butter Boys.

• 7:25Speaker 05

  The Butter Boys. How great are you? That's what this is called. No, but it's fun when, when I have people on that I think are awesome like you.

• 7:34Speaker 00

  Cool, thank you.

• 7:34Speaker 05

  So you have a new podcast also. You're getting into this space, starting to horn in on my space over here a little bit. What is it? Tell me more.

• 7:42Speaker 00

  It's a, it's a show called Crimeless. I do it with journalist Josh Dean. And yeah, he basically, not, not so unlike this show, just in the world of like crime stories and stupid criminals throughout history and throughout the world. Josh kind of reads me a story about, can you believe this bonehead, you know, criminal story? And I'm just hearing it for the first time and commenting on it. And, and I love it. I, I'm shocked every time. That I mean, I'm not shocked and I am shocked that 95% of the stories are from Florida. But that is just, that's just the reality of it. Uh, but yeah, it's, uh, it's out now and it's, it's been super fun to do and Josh is a great co-host.

• 8:23Speaker 05

  Cool. Uh, I am psyched to check that out and it's also a perfect segue into what we're about to do. I'm about to talk to you about this snafu and in this particular case, it is also a crime. Perfect. Have you seen the movie Wall Street?

• 8:38Speaker 00

  I've seen the movie Wall Street.

• 8:40Speaker 05

  Okay. With, uh, Michael Douglas and Charlie Sheen.

• 8:43Speaker 00

  Charlie Sheen.

• 8:44Speaker 05

  Daryl Hannah. It's Oliver Stone movie. It's phenomenal. So the guy that Michael Douglas plays in that movie who's like, uh, a corporate raider and like a Wall Street tycoon. He's based loosely, but he is based on a real guy. Is this, does this ring any bells for you?

• 9:02Speaker 00

  No, I, I don't think I, I don't think I was aware of this. No.

• 9:06Speaker 05

  Okay. So this is a Wall Street legend of sorts. Uh, it's just one of those really epic stories about a man who rose from rags to riches and then plummeted from riches to an orange jumpsuit. Our man of the hour is Ivan Boesky. Uh, and he was, uh, considered widely thought to be the direct inspiration for Michael Douglas's very slippery eighties villain Gordon Gekko. Uh, we have a, we have a photo of Mr. Boesky here.

• 9:38Speaker 00

  It just seems like.

• 9:39Speaker 05

  I, I think that I, I've seen other pictures of him where his eyes look normal. So I'm just gonna guess that's a weird, he's either, he's either winking or, or it's just one of those weird, weird moments, uh, that the cameras get. Um, but there's a slickness to this guy.

• 9:56Speaker 00

  And look at his skin.

• 9:57Speaker 05

  Hey, he's got game show host vibes.

• 10:00Speaker 00

  He does.

• 10:00Speaker 05

  He kinda looks like he'd be fun to hang, have a beer with. I'll be honest.

• 10:04Speaker 00

  That's right.

• 10:05Speaker 05

  Well, we're gonna learn why, uh, he, he might not be somebody that you wanted to hang out with. Also funny, funny footnote, uh, he's wearing a black suit and a white shirt, uh, in this picture. And that, that was his go-to every single day. Uh, he, and, and someone asked him at one point, uh, why do you wear the same? Suit and shirt every day. And he said, I have enough big decisions to make every day. Uh, this is one I can just take off the list, which is funny because Einstein is also famous for that. Albert Einstein always wore the same suit and shirt, uh, and for the same reasons. Just like, take it off your plate, right?

• 10:46Speaker 00

  It makes sense. It makes, I don't know if you do that. I don't do it for those reasons. When I wear the same clothes, it's clearly like a lazy sort of.

• 10:54Speaker 05

  When I wear the same clothes every day, it's problematic. Uh, it's a, it's a bit of a red flag.

• 10:58Speaker 00

  There's stains.

• 10:59Speaker 05

  It happens a lot.

• 11:01Speaker 00

  Explain. Right.

• 11:03Speaker 05

  Here is Michael Douglas's famous piece of dialogue from Wall Street. Uh, he's giving a, a big speech to stockholders meeting for a big company. And he's, he's walking the aisle with a microphone and he's, he's tons of gravitas and he's just saying greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.

• 11:34Speaker 00

  Yeah. Yeah. I think we know now the state of our politics that he was right. It's going great. It's going so good.

• 11:44Speaker 05

  He's all right. What he left out is, and all of that sucks. Like, and that the, the consequences of all of this is not good.

• 11:54Speaker 00

  The end game of this is devastating.

• 11:57Speaker 05

  Exactly. So today we will find out what that spirit conjured throughout the eighties. Of course, your show, Physical, takes place in the eighties. Uh, what, how do you, well, how would you capture the spirit of the eighties? What do you, what, how would you describe it?

• 12:13Speaker 00

  I don't know. I feel like it's almost a good, uh, I, I feel like that, that, that's why there's something to his speech in that movie because it's almost like the eighties was like, you can get up and you can create your own future and greed and wanting to do it and having to step over people to pull it off is a, is a great way, uh, is a great start. And then the other side of it feels like Cyndi Lauper and Madonna, which. I feel like I identify with more in my, in my spirit of what I like to envision of the eighties. But as far as business, yeah, I think it was like that.

• 12:47Speaker 05

  Also, I'm just gonna say a word that I associate with the eighties cocaine.

• 12:52Speaker 00

  Yeah.

• 12:53Speaker 05

  Lots of it.

• 12:54Speaker 00

  Yeah. And that's, that's what crossed the aisles. That's where the art community and the Wall Street found common ground.

• 13:06Speaker 05

  Amen.

• 13:11Speaker 05

  All right. Well, let's get into Ivan Boesky a little bit. He starts out modestly born in 1937. He grew up in post-war Detroit, the son of a Russian immigrant who ran delis and old school brass rail bars, which is those blue collar taverns fueled by rye bread, cigarettes, and cheap liquor. And a little fun Detroit footnote, Boesky attended Mumford High School. Does that mean anything to you?

• 13:35Speaker 00

  No.

• 13:36Speaker 05

  Mumford High School later achieved pop culture immortality, thanks to Eddie Murphy's gray sweatshirt in Beverly Hills Cop.

• 13:43Speaker 00

  Oh, yeah. Okay.

• 13:45Speaker 05

  He has a Mumford sweatshirt. I love that.

• 13:47Speaker 00

  Yeah.

• 13:48Speaker 05

  Well, so Boesky actually went there. From the sounds of it, Ivan strove for more. There's a peculiar quote from his second cousin, found in a Time Magazine article. He had this capacity for single-mindedness. He drove himself mercilessly as far as exercise goes.

• 14:06Speaker 00

  That's the most unrelatable sentence I've ever.

• 14:13Speaker 05

  Yeah, it goes on to talk about how he does hundreds of pushups, which is odd, but I guess speaks to like a driven sort of character as a young man. Have you ever watched someone with incredible focus and drive and just thought, that's really impressive? Before realizing that's the energy that also is wrecking everything?

• 14:33Speaker 00

  Yes, but also they almost seemed, you can't picture them laughing or saying something originally funny, or you just, they almost feel like carbon copies of carbon copies of people. Yeah, I know what you mean. I don't understand that drive.

• 14:49Speaker 05

  It's a little bit Elon Musk's arc, right?

• 14:51Speaker 00

  Yeah.

• 14:52Speaker 05

  It feels like he was this incredibly inspiring, kind of relentless innovator. And then whoa, whoa, it just went so.

• 15:02Speaker 00

  Yeah.

• 15:03Speaker 05

  So far over the.

• 15:06Speaker 05

  The line.

• 15:07Speaker 00

  Yeah.

• 15:07Speaker 05

  At some point.

• 15:08Speaker 00

  Yeah, the ambition gets taken away or just takes off way too far. I also think some kids, speaking of the eighties, I think you watched movies. I think there's a lot of us that saw something like The Karate Kid and wanted to be Daniel LaRusso. And then some people were like, no, I want to be Johnny. I want to be the blond headed dude who's clearly a bad guy. And it's, you see that in their lives.

• 15:34Speaker 05

  That's so interesting. I mean, I definitely, when I saw those guys jumping motorcycles around in their skeleton Halloween costumes. I was like, I definitely want to be that.

• 15:45Speaker 00

  Right.

• 15:46Speaker 05

  But when Daniel LaRusso like kicks him in the face with the swan kick, I'm like,

• 15:51Speaker 00

  Yeah.

• 15:52Speaker 05

  That's who I want to be.

• 15:53Speaker 00

  You're like, that's the guy.

• 15:54Speaker 05

  Yeah.

• 15:55Speaker 00

  Yeah.

• 15:55Speaker 05

  While in school, Boesky married Seema Silberstein in 1962, daughter of real estate lawyer and hotel tycoon Ben Silberstein. We could probably actually do a whole story on Silberstein. He is fascinating in and of himself. But here's a quick anecdote. Allegedly, when he was younger, he was turned away from the Beverly Hills Hotel. On a subsequent visit with his youngest daughter, Muriel, she exclaimed that he thought he should simply buy the place. And so he did.

• 16:25Speaker 00

  Yeah.

• 16:25Speaker 05

  Uh, I guess that's kind of a fuck you. He just bought the hotel for $5.5 million in 1954.

• 16:31Speaker 00

  Oh, my God.

• 16:32Speaker 05

  That's, uh, that's just over 66 million today. And I think it's worth a lot more than that. Safe to say, Boesky was well aware of this class differential he was marrying into and really wanted to prove himself. After graduating from the Detroit College of Law, uh, he drifted through a series of soul sucking gigs, law clerk, accountant, kind of rinse and repeat. None, none of it's sticking, none of it's satisfying. Then his father died in 1964. Boesky, uh, took over the family's last brass rail bar and rebranded it, Le Club Agogo.

• 17:11Speaker 00

  No.

• 17:11Speaker 05

  And, uh, brought in sort of like topless dancers and all, just made it a kind of tawdry, salacious affair. And of course it was bankrupt within two years.

• 17:20Speaker 00

  God, the Brass Rail Bar is so fun. Every time I like hear that, I think of Rudy. When his dad threw him and his brother out of the bar, when all the guys were off work at the mill and they were just drinking at the bar and then Rudy was, Sean Astin was doing something and his dad told the owner to throw them out. It lives in my mind forever because I thought, why don't you just tell your son to leave the bar? Why does the owner have to now get involved in throwing your kid out of the bar? But I always picture that 5pm, blue collar, guys in their, their, you know, destroyed clothing from working at the mill, just having beers. And it just seems so cozy.

• 18:03Speaker 05

  Now introduce like, like a, like a burlesque dancer to that vibe.

• 18:10Speaker 00

  Yeah.

• 18:11Speaker 05

  And it was not successful. This went, it went bankrupt in two years. Boesky at the time was not exactly happy. His father-in-law would constantly let him know how unhappy he was with his daughter's choices. He nicknamed Ivan Boesky Ivan the bum and openly referred to him as a ne'er-do-well who would amount to nothing, which is kind of, kind of a brutal way to talk to your son-in-law.

• 18:37Speaker 00

  I feel like Ivan Broksky was right there for the taking and he went with the bum.

• 18:42Speaker 05

  Yeah. Oh gosh. You're, you're gonna be a tough father-in-law.

• 18:48Speaker 00

  I'm excited.

• 18:49Speaker 05

  With that kind of nickname and.

• 18:51Speaker 00

  Yeah. Love it for the nicknames.

• 18:53Speaker 05

  This is an interesting one. How much of a person's identity or, you know, ambition gets shaped by all the people shouting at them that they're a failure?

• 19:05Speaker 00

  Of course. Oh my God. Absolutely. I mean, that's like the, the core of representation in entertainment and how you're represented, like in entertainment and who you are that you, you know, when you start to identify with people who look like you or you feel like you relate to, like that's what inspires the idea that you think, well, I'm just meant to be a failure or I can be a success, you know, for sure. But you're right. Like criticism like that, it starts to become your reality.

• 19:32Speaker 05

  Yeah, it can either, it can either destroy someone or like, give them like, very intense fuel.

• 19:40Speaker 00

  Yeah.

• 19:40Speaker 05

  And, uh, and I would, I would also say that's probably not like, good fuel, healthy fuel.

• 19:46Speaker 00

  Vengeful, vengeful fuel.

• 19:48Speaker 05

  Right. It's like, I want to be a success, not because I want to like, have nice vacations with my family. It's because I want to make this other person feel like shit.

• 19:57Speaker 00

  Yeah.

• 19:57Speaker 05

  Forever down.

• 19:58Speaker 00

  Buy a hotel when they refuse service. That really puts me in my place. I couldn't do that at a gas station or a, if I went to a fast food place and they disrespected me, I'd be like, you just wait, I'm gonna buy this place. I'm gonna need about 20 years just to kinda get the green together, but I'll show you.

• 20:15Speaker 05

  Well, needless to say, Boesky was extremely motivated, um, in part probably to best his father-in-law. He and Seema moved to the Big Apple. Now Rory, that is a Wall Street term for New York City.

• 20:30Speaker 00

  Okay, you said we were gonna learn today. You said that.

• 20:34Speaker 05

  The Big Apple. Make a note of it.

• 20:36Speaker 00

  Yeah.

• 20:37Speaker 05

  Now, I guess father-in-law Silverstein, um, was at least, uh, kind enough to put them up in a Park Avenue apartment. He even bankrolled Boesky's first, uh, company with $700,000. Um, this was 1975 and Ivan had found his passion and promise on Wall Street. He was an incredibly hard worker, allegedly clocking 20-hour workdays. Um, this is an interesting thing that sort of emerges in a lot of biographical material about him. He never ate. He would go to these big, you know, functions and meals, or like, host big things, dinner parties and this, that, and like, no one ever saw him eat. He would have like, a grape, or like, little nibbles of things. And he was like, as we mentioned

• 21:21Speaker 05

  before, relentlessly working out. Just like a very intense guy. Uh, and, and also, never slept. He's just one of those weird vampire dudes who can like, like, I have my sleep tracker and if it's like, less than eight hours, I'm just like, oh god, this is gonna be a hard day.

• 21:41Speaker 00

  Yeah, your day's ruined.

• 21:42Speaker 05

  My days are. I go into the day already like, ah, I'm on half a tank, guys.

• 21:47Speaker 00

  Like, if I could just get three pastries in my body, I bet I could find some fuel in there.

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• 25:30Speaker 05

  Ivan Bosky was very dedicated to sort of carving out his place on Wall Street. He was not a traditional investor. He worked in a space known as arbitrage. So traditional investing is like planting a tree. You buy a stock and you believe in the company and you hold it for a long time, believing that this company will grow. Stockbrokers will research companies in order to sort of know which companies have the best chances of growing and accumulating value. Arbitrage is a different kind of investing. It's all about timing. It's fast and it's fast in and fast out. So you buy something that you think is temporarily

• 26:13Speaker 05

  Underpriced and then sell it the minute the the price corrects. So it kind of works like this, you would find a small company, something that has like a sort of special or obscure value, maybe it's a product or a service or an expertise of some kind. And it but it's something that a bigger company would want. Then you figure out that a takeover by this bigger company or or any number of bigger companies is likely before the public catches on to this. And you buy a ton of shares of this small company while the stock price is relatively low. Then when this takeover happens and is announced, the stock price jumps and you immediately sell.

• 26:57Speaker 00

  Yeah.

• 26:57Speaker 05

  It has nothing, there's no loyalty, you're not, there's no belief in the company, you're just trying to spot the moment when the price is about to change and be there first. It's one of the most risky kinds of investing. And at the time, most arbitrage players were very cautious, small bets, careful math, lots of hedging. But Boesky was not built this way. He he went, he just went big, he pushed harder, he took huge risks that others wouldn't touch. And as the seventies sort of turned into the eighties, this, all of his bullheaded bluster turned him into a force of nature. He was also incredibly smart and gifted at, you know, market analysis.

• 27:41Speaker 05

  And somehow Ivan Boesky just kept crushing it.

• 27:45Speaker 00

  Every time you say Boesky, I only picture Michael Douglas anyway, he's eating, honestly, just eating the raw meat that he gets at that restaurant.

• 27:54Speaker 05

  That movie was so good, I need to rewatch that.

• 27:56Speaker 00

  I mean, when he stands on the balcony at the apartment and Charlie Sheen just yells out to the city, who am I?

• 28:02Speaker 05

  Yeah.

• 28:02Speaker 00

  It's like, we've all been there.

• 28:05Speaker 05

  Been there.

• 28:08Speaker 05

  Did you live in New York City at any point?

• 28:10Speaker 00

  I lived there for four years and then.

• 28:13Speaker 05

  What, when was that?

• 28:15Speaker 00

  Uh, I was there oh seven to, uh, 2011.

• 28:19Speaker 05

  Ah, right after me. I, I was there 96 to 2007, basically.

• 28:27Speaker 00

  I was there, when I lived there, I was at all those Del Close marathons, watching you guys. Um, that, that, those, that one, that venue was incredible. But those are some of my happiest memories from comedy, just going and watching insane improv at the Del Close marathon.

• 28:43Speaker 05

  Yes.

• 28:44Speaker 00

  Like three in the morning.

• 28:46Speaker 05

  Yes, it was so, it felt so punk rock.

• 28:48Speaker 00

  It's a hundred percent.

• 28:49Speaker 05

  Right? And that was like, that's what I loved about it is like, there were, there were a lot of like, like, I've always been pretty nerdy and like, clean cut, but like, I value punk rock. I value the, the, the, the weirdos and the people on the margins. I just think that they're such a marvelous part of our culture and society. And, and, and then you have an institution like the Upright Citizens Brigade that, um, that just brings it all together somehow. And you have like buttoned up comedians performing next to like, just the wildest performance art wackadoodles.

• 29:27Speaker 00

  Yeah.

• 29:28Speaker 05

  And it's just pure joy. Ah, I love it.

• 29:31Speaker 00

  A hundred percent. Agreed.

• 29:37Speaker 05

  We're now in the midst of the mid eighties. We're talking Lycra leggings, Tom Selleck's mustache. And everyone's asking, where's the beef?

• 29:50Speaker 05

  Because of the, uh, Wendy's commercial? Yeah, it was Wendy's.

• 29:55Speaker 00

  Oh, I don't know. Is that where I came from?

• 29:56Speaker 05

  Where's the beef? Yeah. Like a little old lady opening up her hamburger and it's like a tiny little meat patty.

• 30:01Speaker 00

  Yeah.

• 30:02Speaker 05

  In 1981, the Ivan F. Boesky Corp. was rolling in it, making more than a hundred fifty million dollars in profits from short runs on CBS, Gulf Oil and Conoco. According to Vanity Fair, a hundred and fifty million dollars was more money than Ivan's father-in-law ever had.

• 30:21Speaker 00

  Perfect.

• 30:22Speaker 05

  So I guess some, some nice warm comfort there.

• 30:29Speaker 00

  That's the evolution of the human spirit, right there.

• 30:31Speaker 05

  Yeah, exactly.

• 30:32Speaker 00

  Just gotta get above that number.

• 30:33Speaker 05

  Oh, just gotta win. I just gotta win.

• 30:36Speaker 00

  Yeah.

• 30:36Speaker 05

  At whatever cost to my soul, it's fine. So Ivan is raking it in. By the spring of 1985, he was reportedly the highest paid broker on Wall Street with a net worth of over $280 million, which is nearly $840 million in today's dollars, which I just want to point out, $840 million, like in today's money, is not considered, you know, the crazy wealthy. The crazy wealthy. You have to be a billionaire to be crazy wealthy.

• 31:07Speaker 00

  I know.

• 31:08Speaker 05

  And that's a comment on, like, in the 80s, as much money and excess as these guys are engaging in, we're still not in a culture with the wealth gap that we have today.

• 31:21Speaker 00

  Yeah.

• 31:22Speaker 05

  Right? The wealth gap has just, like, exploded.

• 31:25Speaker 00

  It's exploded, yeah.

• 31:25Speaker 05

  Since the 80s. But it's just interesting to me that we're talking about these guys as if they're Jeff Bezos, or Elon Musk, or Zuckerberg, but they're not even close to that by comparison.

• 31:38Speaker 00

  And yet still titans in their own, in their own time.

• 31:42Speaker 05

  Of the day, they were that.

• 31:44Speaker 00

  And I think it's that trickle-down economics of the 80s where people are like, "Now, give all this money. Give it up here, and you'll get it back. It'll come back to you." Yeah. I know what you mean. Like, that wealth gap is massive now. And I think there's something to the 80s of like, "Yeah, this is what really lit the fire."

• 32:04Speaker 05

  Yeah. Boesky held a spot on the Forbes 400 list of America's wealthiest people. He ran his firm with real intensity, ferocity, orchestrating like a real high-pressure operation of roughly 100 employees. His self-promotion was legendary. He hired his own PR firm to help promote himself. His self-promotion tour included press for his own book, written with the aid of journalist Jeffrey G. Madrick, called "Merger Mania: Arbitrage, Wall Street's Best Kept Money-Making Secret." And, yeah, you know, that big, old, shade-eating grin right on the front.

• 32:46Speaker 00

  It's so funny, like, a book like that, you're like, just considering where I grew up in, like, South Carolina, like, my dad worked at the post office. This is like... Is anybody the post office, you read this money mania arm?

• 32:57Speaker 05

  Yeah, merger, merger mania.

• 33:00Speaker 00

  Merger mania.

• 33:01Speaker 05

  Yeah.

• 33:02Speaker 00

  Book about Wall Street?

• 33:03Speaker 05

  Yeah.

• 33:04Speaker 00

  I feel like you just explaining investing in companies, getting in and getting out is probably the biggest lesson I've gotten.

• 33:11Speaker 05

  My life.

• 33:16Speaker 00

  What it even is. To me, it's just a circus that I can't understand.

• 33:19Speaker 05

  Yes, I agree. I find I find it all very like brain mangling.

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• 36:06Speaker 09

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• 36:48Speaker 09

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• 37:22Speaker 09

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• 37:32Speaker 05

  In 1986, Bowsky was invited to provide a commencement speech at the University of California at Berkeley, Haas School of Business. And this is where that speech that was the inspiration for Gordon Gekko's infamous framing was derived. But it's not exactly the same as Gordon Gekko's. What he said is, greed is all right, by the way. I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself. This sounds like a cult leader. It's weird. You know what it has echoes of? This, this, this, all this stuff emerging

• 38:12Speaker 05

  from both the Christian nationalist movement and Elon Musk, where it's like, empathy is bad.

• 38:20Speaker 00

  Right. Yeah, yeah, yeah.

• 38:21Speaker 05

  This is saying the same thing in the sort of inverse. Greed is good. Self-interest is good. It's very Randi in that way. Like, it's just.

• 38:30Speaker 00

  It's very discard the seven deadly sins and move on. Greed is okay. It's fine.

• 38:36Speaker 05

  Right. Yeah, the Bible literally tells you that this is a deadly sin.

• 38:42Speaker 00

  Yeah.

• 38:43Speaker 05

  It's one of them.

• 38:43Speaker 00

  This is destructive to you personally and to all of people. But if you want to have an elevator in your house, you gotta have a little bit of it.

• 38:53Speaker 05

  Yeah, this is, I love the last sentence. You can be greedy and still feel good about yourself. That's awesome.

• 39:03Speaker 00

  Yeah.

• 39:03Speaker 05

  Okay, so all of this is going on and all of a sudden, record scratch. Just months after riding high, it all unraveled. On November 14th, 1986, Ivan Boesky pleaded guilty to conspiring to file false trading records, which is a complicated way of saying insider trading.

• 39:23Speaker 00

  Okay.

• 39:24Speaker 05

  Basically. Time Magazine put his grinning face on the cover and dubbed him Ivan the Terrible, which is a little derivative, but okay.

• 39:32Speaker 00

  It's still better than Ivan the bum from The Father of.

• 39:34Speaker 05

  Sure.

• 39:37Speaker 05

  Not and not as good as Ivan Broksky.

• 39:41Speaker 00

  Right, that's right.

• 39:42Speaker 05

  One minute this guy is Wall Street royalty, the next he's a cautionary tale and the high roller era was over. He is headed to prison. Do you think that repeated success always turns people into egomaniacs or, or like just disasters? Is it possible to remain humble?

• 40:04Speaker 00

  I think it's possible to remain humble based on, I think, how much you've acquired

• 40:13Speaker 00

  as a person before you've reached that success. For instance, I think a lot of people in our industry who find fame or fortune later in their careers tend to be so much

• 40:27Speaker 05

  A little more chill.

• 40:28Speaker 00

  And fully aware that life is fickle and it can go away. And yesterday I was doing this job and today I'm grateful I've got this one. But I think when you have it at a young age and nothing against those people that get it at a young age because they are missing that, that sort of educational step. I think a lot of times they can come off as, as awful people. And maybe it's something happens and they turn a corner and they change, but you definitely see it in people who come from a certain background. They, I think it's just learning the value of, of things for sure. But I think people can remain humble. I tell people all the time that like friends back home or people who ask me if, if I've worked with someone, they always want to know if someone's a jerk.

• 41:11Speaker 00

  I go, I gotta be honest, it's very seldom I run into someone who I really think is just kind of a piece of shit. I go, for the most part, everybody's just at their job, whether they're wildly famous or not, and they're just trying to do the job and then go home and hang out with their family. It's just kind of our universal situation.

• 41:33Speaker 05

  Well, you know what that means, Rory?

• 41:36Speaker 00

  What?

• 41:37Speaker 05

  That means you're the piece of shit.

• 41:41Speaker 00

  Oh my God, shit.

• 41:42Speaker 05

  If you can't actually see how much other people are a piece of shit, it means you're a giant piece of shit.

• 41:48Speaker 00

  Oh, fuck, I just thought they were so fun. I looked up to all of them.

• 41:56Speaker 05

  I mean, our industry, obviously, is a very hot crucible of all of this stuff. But I, I think also, just looking into the business world, you know, and seeing especially these, these tech, modern tech titans and your, your Jeff Bezos's and so forth. It's really amazing. You can chart their values and their appearance.

• 42:18Speaker 00

  Yep.

• 42:18Speaker 05

  Their physical appearance, how it changes over time with their power and wealth. And it's, uh, it's very disheartening. You know, the, the, the notion that absolute power corrupts absolutely, um, really seems to hold a lot of water.

• 42:37Speaker 00

  Yes, 100%.

• 42:38Speaker 05

  Yeah.

• 42:39Speaker 00

  And also you, you do wonder, like, in the origin story of these billionaires or tech titans, you do wonder, like, are they coming from a place of, like, sort of like Ivan? Like, was it vengeance? Were they like, oh, I'll show this world.

• 42:52Speaker 05

  Yeah.

• 42:52Speaker 00

  I have value and I'll become this because I think the world has treated me this way. There's such an irony to then becoming a billionaire who kind of in many ways runs the world and not having compassion for who might also be what you once were, but instead being like, no, those people are trash.

• 43:11Speaker 05

  Yes.

• 43:12Speaker 00

  Well, that's what you.

• 43:13Speaker 05

  Right. We have pictures of you.

• 43:16Speaker 00

  Yeah.

• 43:17Speaker 05

  We have, we have pictures of Jeff Bezos as the sweetest little nerd.

• 43:21Speaker 00

  Yeah.

• 43:22Speaker 05

  So, so bizarre.

• 43:24Speaker 00

  I think that's why I like the brass rail bars. Just keep me in that pocket where I can just go get a beer in a pint glass. I don't want to run the world.

• 43:34Speaker 05

  Don't limit yourself, Rory. I have a lot. You can't, we want you to run the world.

• 43:39Speaker 00

  I mean, it'd be more fun.

• 43:41Speaker 05

  Yeah.

• 43:41Speaker 00

  I'll tell you that. Burning Man wouldn't be just a week. It wouldn't be just one week in one location. I'll tell you that.

• 43:48Speaker 05

  Welcome to Rory's world.

• 43:56Speaker 05

  All right. So how did we get here? How did this epic crumble of a Wall Street Titan occur? It starts in 1982 when Boesky took a brutal hit, losing $60 million on a bad deal. Again, that's a lot of money, but it was way more back then. Suddenly, this guy who always seemed to be one step ahead was underwater. And that's when the line started to blur. The pressure mounted, the bets got darker, and Boesky crossed into insider trading. Is there anything more human than trying to recover from a humiliating loss by just immediately making a series of worse decisions?

• 44:43Speaker 00

  It is true. It's our common bond.

• 44:45Speaker 05

  It's such, it's what makes us all human.

• 44:49Speaker 00

  Yeah.

• 44:50Speaker 05

  Even on a small scale, I just feel like, like if you, you know, you spill something in your lap and then your panic makes you spill like so much more shit. God.

• 45:02Speaker 00

  Yeah.

• 45:02Speaker 05

  So now it's 1985 and Boesky's having an amazing year. And so were a lot of other savvy traders, all raking in millions. In fact, they were winning so hard that it was beginning to feel an awful lot like somebody knew something somewhere that somehow was tipping off those someone's with some slick insider gravy. Basically, regulators began to suspect that the stench of insider information was bubbling up from the sewage of these multimillion dollar deals. Quick Wall Street check in. Do you understand what insider trading is conceptually?

• 45:43Speaker 00

  I think so. For instance, your example earlier about a business being acquired by another business and finding that out and deciding, all right, let's buy low so we can sell high because we know it's coming.

• 45:54Speaker 05

  Right. So the honest way to do that is to like, just do your research and your homework and try to figure out which companies are going to get bought. The illegal insider trading version is for someone who knows a company is about to be bought to tell, to like whisper it to you so you can then go and buy those shares. And then as soon as the company's bought, the those, the value of those shares just like rockets up.

• 46:18Speaker 00

  Yeah, it seems like it's very legal now, because it seems to occur quite often.

• 46:25Speaker 05

  That's so ironic.

• 46:27Speaker 00

  Within the White House directly.

• 46:29Speaker 05

  Well, it is. It's so ironic. And of course, within Congress, so many, the Congress people have so much access to what is considered inside information.

• 46:41Speaker 00

  Yes.

• 46:41Speaker 05

  Because they know about laws that are coming that will dramatically affect these various companies and industries, and they can invest accordingly. And they do. And it is so dark. And the irony is that the Securities and Exchange Commission, which is tasked with catching these people and bringing them to justice, they now have incredible analytics and, you know, tools to catch people doing this stuff, and to catch sort of suspicious activity, and then be able to research massive amounts of data more quickly. Like, the tools to catch these people are better than ever. And yet, it feels like we're just swimming in it more than ever, which is insane.

• 47:26Speaker 00

  All the time. Yeah, yeah.

• 47:28Speaker 05

  Yeah. So these investigators back in the day, they thought they smelled something, and they were exactly right. According to Fortune, it was in 1985 that the SEC began to unravel a tangled web, beginning with two Merrill Lynch employees in Venezuela. The SEC managed to connect them to high-profile investment banker Dennis Levine, among others. And it was Levine who then gave up the gossip on Gordon Gek, I mean, Ivan Boesky. Levine had struck a deal to cooperate with the US Attorney of the Southern District of New York, who was, wait for it, Rudy Giuliani.

• 48:11Speaker 00

  Oh, wow.

• 48:13Speaker 05

  This, of course, is pre-mayoral, pre-disbarred, pre-four seasons total landscaping Giuliani.

• 48:22Speaker 00

  The Four Seasons thing will live forever.

• 48:24Speaker 05

  Oh my god, just the-

• 48:26Speaker 00

  Yeah, but to then act like you meant to do it.

• 48:30Speaker 05

  The abject stupidity of it all, and it's so shocking.

• 48:35Speaker 00

  Yeah.

• 48:36Speaker 05

  And shocking to think there was a time when he was actually on the right side of things. Like, this was, he was actually doing good work as the attorney for the Southern District of New York.

• 48:45Speaker 00

  And was beloved, yeah.

• 48:46Speaker 05

  Yeah. So Levine admitted to providing Boesky with non-public information about pending deals. And this was enough to bring Boesky in, and they caught him red-handed. Then, interestingly, Boesky would make a deal of his own with the Department of Justice, and this would lower his prison sentence from five years to three. Not only did he wind up paying $100 million, which at the time was a record-high penalty for such criminal activity, he also agreed to tattle on other traders by secretly recording them and turning them over to authorities.

• 49:28Speaker 00

  He's one of those guys.

• 49:30Speaker 05

  Yeah.

• 49:30Speaker 00

  He narked.

• 49:31Speaker 05

  He narked.

• 49:32Speaker 00

  He ratted.

• 49:33Speaker 05

  He turned. He did, he did bad things, and then tried to get off the hook by doing

• 49:42Speaker 05

  bad things to other bad guys, I guess.

• 49:45Speaker 00

  Yeah.

• 49:46Speaker 05

  And it's very morally ambiguous.

• 49:49Speaker 00

  You don't know how to feel about it.

• 49:51Speaker 05

  Yeah, because you don't like rats. Rats are like-

• 49:53Speaker 00

  It's the worst.

• 49:53Speaker 05

  They're turncoats, but like, oftentimes, they're on the morally and ethically correct side of things.

• 49:58Speaker 00

  Yeah, you should, you actually should admire them, but you're like, "No, no."

• 50:01Speaker 05

  Now, I respect you even less.

• 50:03Speaker 00

  Yeah, you should have been a criminal to begin with.

• 50:05Speaker 05

  Yeah.

• 50:06Speaker 00

  But now that you are one, leave the other criminals alone.

• 50:11Speaker 05

  I think it's the cynicism of it, right? That's, it's like, it's not coming from a good place.

• 50:17Speaker 00

  Right, yeah.

• 50:17Speaker 05

  Yeah, there you go. "The fall from grace was swift and merciless." In the 1986 Times article, an unidentified friend of Boesky's is quoted, "He wanted so much to be accepted, and he thought money was the only way." Hmm, that's kind of poignant, actually.

• 50:35Speaker 00

  Sad.

• 50:35Speaker 05

  Another investment banker, also unidentified, is quoted as saying, "I always knew he was a rat."

• 50:45Speaker 05

  That's in Time Magazine. I always knew he was a rat. It's like so Shakespearean.

• 50:50Speaker 00

  For to see money in your future. The other guy being so poignant, so intelligent and deep. Money isn't the path. Oh, all right. Well, you're also a trader. You're also in investments.

• 51:03Speaker 05

  A few quick hits on on his swift downfall. His book, Merger Mania, was immediately dropped by the publisher Henry Holt and Company. He was forced to scrap a plan to remodel his Westchester County family home to mirror that of Thomas Jefferson's Monticello.

• 51:23Speaker 00

  A common goal for all of us.

• 51:25Speaker 05

  Sure. I mean, we all want to get there. We all want, we all want our homes to look like Monticello.

• 51:30Speaker 00

  Yeah.

• 51:31Speaker 05

  I mean, what? This is the hubris. Like, Jesus. He was forced to withdraw as a trustee at the American Ballet Theater. You know, that hurt. He had to cancel and rescind a one and a half million dollar grant to Princeton where his son was attending. That's going to be hard on the son.

• 51:48Speaker 00

  Yep.

• 51:49Speaker 05

  One crazy aside, John Mulhern Jr., one of Boesky's proteges, feared he himself was about to be implicated in the scandal and allegedly loaded an assault rifle with the intent of killing Boesky and his former head trader, but he was stopped en route, according to police.

• 52:09Speaker 00

  Oh, wow.

• 52:09Speaker 05

  Boesky pissed some people off. Of course, he got prison time and this massive fine. This is also interesting. Boesky was permanently banned from work in the financial sector, never to touch stocks, bonds, any kind of securities again. Rory, what if you got banned from comedy?

• 52:29Speaker 00

  I was just, I was literally going, what would I do?

• 52:33Speaker 05

  Yeah.

• 52:34Speaker 00

  What's my plan B?

• 52:37Speaker 00

  I don't know. I think I'd open a coffee shop. Or I'd try to coach college soccer.

• 52:44Speaker 05

  That's cool. All right. That's actually, those are both nice. You could do both. Might actually

• 52:49Speaker 00

  I'd try to do both of those. I'd actually try to have both of those things.

• 52:52Speaker 05

  A soccer cafe.

• 52:53Speaker 00

  A college soccer coffee place.

• 52:55Speaker 05

  Yeah, sure.

• 52:56Speaker 00

  For the team, like the Peach Pit in 90210.

• 52:59Speaker 05

  Well, so even having to, to pay this exorbitant penalty, Boesky was fine. Like, he still had a ton of money. And, and after he was kicked off Wall Street, a lot more regulations and rules were set up in the world of finance to keep insider trading under control. Most notably was the addition of the Inside Trading and Securities Fraud Enforcement Act of 1988. This act increased penalties for insider trading, required firms to improve internal controls, and introduced a bounty for informants. In April 1990, Boesky was released for cooperating

• 53:41Speaker 05

  with the feds, serving only two of his three-year sentence. Boesky would recede from public view and live out his days in relative peace, having passed away in May 2024. Forever a reminder. Yeah, he just passed away a couple of years ago. Yeah.

• 53:58Speaker 00

  Oh, wow. Yeah. I gotta say, like, if he's getting out of it with all that money, it's kind of like, what a great retirement. Sure, you don't want to do two years in prison, but now you're out of the game and you still have enough money to just go and coast, just coast until it's over?

• 54:17Speaker 05

  Yeah. And he was, I'm sure he was in like a relatively pleasant white-collar prison, too. Yeah. Wasn't like that. But here's what's interesting. A lot of people look at things like this and, and whatever side you're on, you might just be like, well, it's, these are relatively victimless crimes, right? That they're, they're just, it's just numbers. It's just financial finagling. Like, is anyone getting hurt? But the truth is, These deals that were happening in the eighties and on Wall Street, both the raider, the sort of corporate raider culture and all of this, this short buying and selling that was going on.

• 54:58Speaker 05

  These moves demolished companies and put thousands of people out of work. That's part of the great story in Wall Street is that Charlie Sheen's dad, played by his real dad, Martin Sheen, is a mechanic at this company that Gordon Gekko is about to, you know, break apart. And he's going to lose his job, which is a very sort of personal poignant depiction of what I'm talking about.

• 55:21Speaker 00

  Yeah.

• 55:22Speaker 05

  These are not victimless crimes. That they, there's a massive price to be paid and it's being paid by working class people. And so, you know, one could argue that a two-year prison sentence, oh, that feels fine because all he was doing is like pushing pencils around and like, you know, changing numbers. Maybe that's not fair. Maybe that's not enough, you know?

• 55:46Speaker 00

  Yeah. And I were just talking about earlier about how rampant it is now as a thing. You're like, oh God, now it doesn't even like two years almost seems insane to get any kind of a penalty whatsoever. And you're right, it's the blue collar working class that pays for it.

• 56:02Speaker 05

  That's our story, Rory Scoville. Any final thoughts, reflections? Did it, did it teach you anything about humanity?

• 56:10Speaker 00

  Well, I feel like I always knew there was this evil out there, this greed. But you having quoted that speech does make me feel like, what's the harm in getting my hands a little dirty?

• 56:25Speaker 05

  Mm hmm.

• 56:26Speaker 00

  For just a couple of months even. You know what I mean?

• 56:30Speaker 05

  You can do it.

• 56:31Speaker 00

  Okay, I got a little cash on the side.

• 56:33Speaker 05

  You can be greedy and still feel good about yourself.

• 56:39Speaker 05

  That is the lesson here.

• 56:41Speaker 00

  Yes. That's what I want.

• 56:44Speaker 05

  To your point, though, I really like that you're connecting it to this moment because the playbook hasn't changed since then, right? Boesky believed winning proved he was right. And once you convince yourself of that, the rules feel optional, which is very much the energy of this Trump administration.

• 57:07Speaker 00

  It's so much of it.

• 57:08Speaker 05

  Like, if you, if you win, if you're just winning, if you're just making libs cry, then, uh, then you don't actually have to adhere to any standards or rules or frameworks or even the fucking constitution.

• 57:23Speaker 00

  I know. I know. It's, it's certainly a lesson in how critical these institutions, to a degree, are. Not that they can't all be improved, but we're learning that if you demolish any of these institutions, you're up against a whole new, a whole new beast of rebuild, if you get the chance, if you get the chance to rebuild.

• 57:46Speaker 05

  If, if, yeah, if we're lucky enough.

• 57:48Speaker 00

  Yeah.

• 57:49Speaker 05

  To, to come back in some way.

• 57:51Speaker 00

  And, and build it back better, stronger, more rules, more regulations.

• 57:55Speaker 05

  Yeah.

• 57:55Speaker 00

  More accountability. But yeah, I think as individuals, if we don't have, if we don't care about accountability, then none of it can hold up.

• 58:03Speaker 05

  I'll tell you what's interesting, having done tons of these stories about, about major snafus, and so many of them are the result of darker forces and human nature. The one thing that rarely happens is accountability of any kind. And in this case, even two years of prison is like, thank God, he got something. Like, it's just, it feels like, like a little small morsel of justice, not like full justice.

• 58:34Speaker 00

  Slap on the wrist.

• 58:35Speaker 05

  Roy Scobhal, this has been an absolute delight and a pleasure. Oh, my God. Thanks for inviting me. I appreciate it. That was a fun road to go down. All right. We'll see you out there.

• 58:46Speaker 05

  Snafu is a production of iHeart Podcasts and Snafu Media, a partnership between Film Nation Entertainment and Pacific Electric Picture Company. Post-production and creative support from Good Egg Audio. Our executive producers are me, Ed Helms, Mike Falbo, Glenn Basner, Andy Kim, and Dylan Fagan. This episode was produced by Alyssa Martino and Tori Smith. Our managing producer is Carl Nellis. Our video editor is Jared Smith. Technical direction and engineering from Nick Dooley. Additional story editing from Carl Nellis. Our creative executive is Brett Harris. Logo and branding by Matt Gosson and The Collected Words. Legal review from Dan Welsh, Megan Halson, and Caroline Johnson.

• 59:29Speaker 05

  Special thanks to Isaac Dunham, Adam Horn, Lane Klein, and everyone at iHeart Podcasts, but especially Will Pearson, Carrie Lieberman, and Nikki Ator. While I have you, don't forget to pick up a copy of my book, Snafu: The Definitive Guide to History's Greatest Screwups. It's available now from any book retailer. Just go to snafu-book.com. Thanks for listening and see you next week.

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