Boesky Sentence to End, but Not His Testimony

Ivan Boesky, the disgraced Wall Street financier who made millions the easy, illegal way--by buying inside information--leaves jail Wednesday, but his fellow arbitragers are not exactly forming a welcome-home committee.

“If Wall Street was like the Mafia, he would be dead by now,” said one big-time stock speculator who asked that his name not be revealed. “We didn’t call him ‘Piggy’ for nothing. He went down like a drowning rat, informing on all his friends.”

Boesky received a light sentence for his role in shaping Wall Street’s biggest insider-trading scandal in decades and is expected to be the star witness against those who allegedly helped him make his fortune, including junk-bond king Michael Milken, who is charged with racketeering and securities fraud.

Boesky received three years for pleading guilty to a single charge of filing false information to the Securities and Exchange Commission after he agreed to cooperate with the government in its probe of illegal insider trading.

He is finishing up his term at a Brooklyn halfway house and is expected to be released Wednesday morning.

But his cooperation with the government is far from over. His lawyer, Robert McCaw, said Boesky won’t decide what he will do next until he finishes testifying.

Boesky, once one of Wall Street’s top speculators concentrating on stocks of likely takeover companies, shocked the financial world in 1986 when he agreed to pay $100 million to settle insider-trading charges brought by the SEC.

Boesky also helped prosecutors bring securities fraud charges against such big fish as Drexel Burnham Lambert Inc., which is being liquidated, and Milken.

Although Boesky’s scheduled release date is Wednesday, he has been living at home for about the past 60 days, said Napoleon Johnson, program administrator at the halfway house. He said Boesky is part of a home confinement program established to reduce overcrowding.

During this time, Boesky has had to check in regularly with the halfway house and he is expected to visit Wednesday to sign formal release papers, said Johnson.

“Then he’ll be through with us and the Bureau of Prisons,” he said.

Wall Street traders also said they hoped he would not try to re-enter the business, which he could through a loophole in the law.

“He brought marketing and publicity to arbitrage. So a lot of people didn’t like him for that. The arbitrage community is very secretive and likes to stay that way,” one arbitrager said.