Related topics

U.S. Judge Denies Boesky an Out in Civil Suits

May 26, 1987

NEW YORK (AP) _ A federal judge ruled Tuesday that disgraced stock speculator Ivan F. Boesky cannot use his cooperation with the federal probe of Wall Street insider trading as an excuse to delay several civil suits against him.

In a blistering, 16-page opinion, U.S. District Judge Milton Pollack said Boesky ″deliberately courted the impediment he seeks to errect as a shield.″

Pollack ruled that ″the only unfairness″ is Boesky’s claim ″that it would be unfair to treat him normally.″

Boesky is being sued by several limited partners in his $1 billion investment partnership. The federal civil suits against Boesky and companies he controlled accused the arbitrageur of allegedly misleading nearly 40 limited partners in the 1986 offering and sought millions of dollars in repayment with interest and attorneys fees.

One suit was filed by Guinness PLC, the London food and liquor company, which invested $100 million in the limited partnership, Ivan F. Boesky & Co.

Another suit by Boesky’s Bermuda-based investment company, Farnsworth & Hastings Ltd. sought to recoup its $20 million investment.

The third suit was filed on behalf of more than 40 plaintiffs, including individuals and companies, who sought to recover about $278 million.

The lawsuits followed the revelation late last year that Boesky had reached a $100 million settlement of Securities and Exchange Commission civil charges and was cooperating with federal prosecutors.

Boesky, who pleaded guilty to one count of violating federal securities laws April 23, wanted Pollack to sever him from the civil cases and delay them because his plea agreement with the government required him to keep the nature of his cooperation confidential.

Boesky maintained he was caught in a ″Catch-22″ situation where compliance with the plea agreement would hamper his defense against the civil suits but answering their accusations could ″adversely affect the ongoing government investigations.″

But Pollack had little sympathy, stating: ″It is plainly ludicrous for Mr. Boesky to argue that it is ‘unfair’ to compel him to face the civil lawsuits against him which are the creations of his own alleged misconduct. The plight which he imagines that he is in stems solely from his own activities.″

Pollack ruled that ″Boesky’s plea agreement with the government may not be used to hobble civil suits premised on facts arising out of the criminal investigation.″

The judge ordered Boesky to answer the allegations in the complaints within 10 days.

Boesky’s lawyer in the civil case, Theodore Levine, said his side would comply.

Update hourly