Sequence of Key Events in the Boesky Scandal With AM-Boesky Bjt
NEW YORK (AP) _ Here is a chronology of the major developments in the federal investigation of Wall Street practices that led to speculator Ivan F. Boesky’s record $100 million penalty payment to the Securities and Exchange Commission and his guilty plea to violating securities law:
May 12, 1986 - The Securities and Exchange Commission charges Dennis B. Levine of Drexel Burnham Lambert Inc. with making $12.6 million in profits from illegal trading on inside information since 1980. Levine is subsequently arrested, pleads guilty to felony charges and cooperates with investigators.
Nov. 14 - Boesky agrees to pay a $100 million penalty to settle charges of trading on insider information supplied by Levine in 1985 and 1986. He also agrees to cooperate with investigators and to plead guilty to a single unspecified criminal charge.
Nov. 21 - In the first lawsuit against Boesky by a shareholder, Angelo Oriolo of Pennsville, N.J., claims he was hurt financially in 1985 when he sold shares in General Foods Corp., a stock that was the subject of takeover speculation by Boesky.
Dec. 18 - FMC Corp. of Chicago announces a lawsuit seeking more than $260 million from Boesky and others. FMC claims insider trading inflated the cost of its $2 billion recapitalization.
Jan. 28, 1987 - Michael Davidoff, the former head trader for Boesky, pleads guilty to one count of securities fraud and agrees to cooperate in the government’s investigation.
Feb. 11-12 - Insider trading charges are filed against Richard Wigton, a vice president at Kidder, Peabody & Co.; Timothy L. Tabor, a former vice president at Kidder and Merrill Lynch & Co.; and Robert Freeman, a partner at Goldman Sachs. They are charged with allegedly swapping inside information that was used to make illegal profits for Kidder Peabody. Freeman is also charged with trading for his own account.
Feb. 13 - Martin A. Siegel resigns as a managing director of Drexel Burnham Lambert Inc. and pleads guilty to illegal stock trading and tax evasion. He faces up to 10 years in prison and a $260,000 fine. In addition, he agrees to give up $9 million to settle civil charges related to a complaint that he engaged in insider trading with Boesky.
Feb. 20 - Levine is sentenced to two years in prison and fined $362,000 on charges of securities fraud, tax evasion and perjury.
March 19 - Boyd L. Jefferies, founder of the Los Angeles securities firm Jefferies & Co., pleads guilty to two criminal charges involving securities law violations, including an arrangement that enabled Boesky to falsify the extent of his stock holdings. Jefferies resigns as chairman of Jefferies & Co. and agrees to stay out of the securities business for at least five years.
April 9 - Freeman, Wigton and Tabor are charged by a federal grand jury with conspiracy to violate federal securities, mail fraud and wire fraud laws. All three also are charged with three counts each of securities fraud. The indictment does not name either Goldman Sachs or Kidder Peabody as defendants.
April 23 - Boesky pleads guilty to one criminal charge, conspiracy to make false statements to the SEC, and is released without bail. He faces a maximum penalty of five years in prison and a $250,000 fine at a sentencing scheduled for Aug. 21, which is later postponed to Dec. 18. Specifically, Boesky confesses to conspiring with others, who are not identified, to lie to the SEC with respect to purchases of stock in Fischbach Corp. in 1984. Federal officials say Boesky is still cooperating with the government’s investigation.
May 13 - The government drops the charges against Freeman, Tabor and Wigton, claiming it needs more time to investigate. Prosecutors say they expect a grand jury to hand up a broader indictment.
May 26 - U.S. District Judge Milton Pollack rules Boesky cannot use his cooperation with the federal investigation of insider trading as an excuse to delay several civil suits against him.
June 4 - Kidder Peabody agrees to pay $25.29 million to settle civil charges of insider trading and an improper ″stock parking″ scheme with Boesky. The U.S. attorney’s office says Kidder will not be prosecuted.
Aug. 25 - Judge Pollack consolidates more than a dozen civil lawsuits against Boesky into a single case.
Sept. 23 - Setrag Mooradian, formerly an accountant for Boesky’s broker- dealer firm Seemala Corp., agrees to settle SEC charges of violating securities laws and cooperate in the government’s continuing investigation.
Dec. 3 - In a presentencing conference, U.S. District Judge Morris E. Lasker indicates Boesky will get at least six months in prison when he is sentenced on Dec. 18.
Dec. 14 - Prosecutors release a memo asking Lasker to balance ″both Boesky’s extensive criminal conduct and, in mitigation, his outstanding cooperation.″
Dec. 16 - Defense lawyers release excerpts from a memo to Lasker seeking leniency for Boesky, arguing that Boesky ″was driven by some blind compulsion.″
Dec. 18 - Boesky is sentenced to three years in prison. Partly because of his continuing cooperation with the investigation, he will not begin serving the term until March 24.