Jefferies Says He Knowingly ‘Bent the Rules’ : Financier Tells Judge He Disgraced Himself
Boyd Jefferies, who has admitted breaking the law with Wall Street’s once-powerful stock speculator Ivan Boesky, has told a federal judge he believed that he was “bending the rules” at the time.
“I am certainly disgraced by my actions in 1984, 1985 and 1986,” Jefferies told Judge Morris Lasker, according to a transcript of a pre-sentence hearing made available Friday.
“I knew at the time I was bending the rules,” Jefferies said in the hearing Thursday. “I felt the securities industry, all of us were bending the rules.”
He told the judge he had done some things for clients that he should not have. “I thought that if were caught I would get a slap on the wrist,” he said.
Jefferies pleaded guilty in April, 1987 to two counts of securities fraud.
One of those counts involved parking stocks for Boesky. Parking is an illegal tactic in which a broker holds stock to conceal its true ownership.
Jail Time Indicated
In the hearing, Lasker indicated that Jefferies would get jail time, but probably not as much as Boesky’s three years. Lasker said Jefferies’ crimes were not as extreme as Boesky’s.
Jefferies will be sentenced Thursday.
Jefferies was a key witness for the government in its securities fraud and tax case against Paul Bilzerian, who was convicted by a federal jury June 9. The Securities and Exchange Commission filed a long list of civil charges against Bilzerian Thursday.
Bilzerian, the corporate raider who stepped down as Singer Co. chairman after the SEC charges were filed Thursday, used Jefferies’ firm to park stock, according to trial testimony.
Jefferies is also an important witness in the stock manipulation case against GAF Corp. and is expected to testify against investor Salim Lewis this fall.
Jefferies, 58, is founder of the Los Angeles-based Jefferies & Co. brokerage firm that pioneered off-hours trading.
Although he was forced to step down from the firm as part of his plea agreement, he will be allowed to apply to re-enter the securities business after serving his sentence.