URGENT Boyd Jefferies to Plead Guilty to Securities Fraud, Resign Post
NEW YORK (AP) _ Boyd L. Jefferies, one of nation’s most successful securities brokers, said today he would plead guilty to two criminal charges related to trading stocks with former speculator Ivan F. Boesky.
Jefferies, founder and chairman of Los Angeles-based Jefferies & Co., said he also resigned from the firm.
He said in a letter to the firm’s employees and shareholders that he would plead guilty to two felony counts of violating federal securities laws.
The charges resulted from a transaction in which he agreed to buy certain stocks from entities controlled by Boesky with the understanding he would sell the stocks back to Boesky later.
The transaction, known as ″parking″ securities, enabled Boesky to falsify the true extent of his stock holdings, Jefferies’ statement said.
Last November, Boesky settled government charges that he engaged in insider trading by, among other things, paying a $100 million in penalties and agreeing to plead guilty to one felony charge.
According to Jefferies, after he bought the stocks from Boesky, ″the market value of one of the stocks fell sharply and, pursuant to their agreement a Boesky entity paid Jefferies & Co. $3 million to offset the loss.″
Boyd Jefferies said that, in one of his guilty pleas, he would admit that he ordered his firm to bill Boesky for $3 million for ″investment advisory and corporate finance services,″ when in fact Jefferies ″treated the $3 million as an offset to the losses it experienced.″