Drexel Sues Boesky, Claims He Stole Profits

In a bizarre twist to the insider trading saga of the 1980s, Drexel Burnham Lambert, which was destroyed by the scandal, Friday sued its former client, Ivan F. Boesky, for stealing millions of dollars of Drexel’s profits.

Boesky, once one of Wall Street’s most powerful stock speculators, was the key player in the insider trading scandal, and his cooperation with authorities led to criminal charges against Drexel, its former junk bond chief, Michael Milken, and others.

The civil suit, filed in federal court in Manhattan, alleges that Milken paid Boesky with Drexel’s profit for his help in illegal activities. The suit seeks at least $4.86 million.

The Federal Deposit Insurance Corp. and the Resolution Trust Corp., which filed claims against Drexel as part of its bankruptcy proceedings, are also plaintiffs in the case.

The suit states that “Boesky aided Milken and others in targeting Drexel as, and transforming Drexel into, the instrument of criminal schemes.”