Part 3: Chapter 15, Boesky Day Summary and Analysis

The day after the Drexel group returned from the Tokyo bond conference, Ivan Boesky pleaded guilty to insider trading. The day was November 14, 1986. Boesky also agreed to pay a $100 million fine and to cooperate with the government in its investigation of insider trading on Wall Street. Drexel had $640 million in Boesky underwritings the records of which were placed in a closet of Drexel investment banker Stephen Weinroth. He is the man who was responsible for unwinding the positions to make the bondholders whole on their investment. Within minutes of the announcement, the SEC issued subpoenas. The trading of Milken, Icahn, Posner and Boyd Jeffries, as well as others was under investigation. As the investigation went on, it seemed to involve other Wall Street figures and not Milken and the Drexel bunch.

Milken and Drexel had...