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December 14, 1986

Undated (AP) _ Hours before the market’s 9:30 opening bell, chauffered stretch limos and an occasional Maserati circled the Regency Hotel on upper Park Avenue. They waited for the wheeler-dealers attending the ″power breakfasts″ pioneered by the Tisch clan, who among other acquisitions took over the Loews hotel chain. But the subdued noise levels indicated the only mergers on the agenda involved scrambled eggs and lox.

Suddenly, as if belatedly reflecting the true meaning of Christmas, ethics were back in style, or at least in earnest conversation on Wall Street.

The morality of inside information was raised during the noontime prayer meetings and study groups that two Jesuit priests conduct in an upstairs, computer-equipped mission around the corner from the New York Stock Exchange.

″Info-manics, as they’re called down here, are on everybody’s mind now,″ said the Rev. Neil Doherty. ″Trust is elemental to the whole operation of the market. Trading is done by voice auction, faith in another person’s word. It’s supposed to be a fair playing field, but the inside traders had a sense of somehow being exempt.″

On the Tuesday after Boesky’s downfall, the question of what constitutes illegal information came up in a seminar on ″Faith Life and Work Life″ conducted by the Rev. Joseph Dirr, director of the Jesuit office.

″The market works on rumor, a mosaic of piecing information together,″ Dirr recalled the discussion. ″But there are so many people who have access to privileged information - not just the dealers and the board of directors, but attorneys, secretaries, printing people, cleaning ladies - how do you determine in your own conscience when a tip is in the realm of rumor or inside information?″

In the frail wintry shadow of Trinity Church’s brownstone steeple, where he has been snapping his shoe cloths at the feet of the financial world’s movers and shakers for the past two decades, Reverend Brown called on St. Paul to testify to the mood of Wall Street.

″The love of money is the root of all evil,″ he quoted from ″memory and experience. Play that market and you’re bound to be worried up with things of the devil.″

Religion also made the financial pages with the announcement that the Ivan F. and Seema Boesky Family Library had changed its name to the Library of the Jewish Theological Seminary.

Veteran market watchers speculated that the bleakest Christmas mood gripped those who took a beating in what they denounced as ″ultimate insiders arbitrage,″ when Boesky was allowed to dump a half-billion dollars worth of securities in advance of the wrongdoing revelations that drove down their prices.

″You just have to look at the movement of stocks to know that a lot of these guys have been hurt and hurt badly,″ observed veteran arbitrager Leonard Sheriff, who has been doing business on the street for 40 years. ″These big dealers are not engaged in classic arbitrage, which means a public announcement and then you deal. They are high-risk speculators or worse.″

According to Henry Gellermann, retired from the investment firm of Bache & Co., now a part of Prudential Bache Securities Inc.: ″The street always has fluctuated between greed and fear. The big difference today is that you have a lot of people below the age of 30 controlling vast sums of money. These bright, brash MBAs went through a fairly brief course of training that had no time for ethics but imbued them with the feeling that their first obligation was to cheat.″

As a Salvation Army band pumped out the unintentionally accusatory carol, ″Do You Hear What I Hear?″ the calm of the Christmas season seemed to settle with the dusk over the jittery street. Harry’s l4 private dining rooms, accommodating up to 500 guests, were booked solid from here on out for Christmas parties.

Santa would still come to Drexel Burnham where Levine was the top merger maven and where the chairman griped that investigators were asking for such detailed information the firm could hardly do business. Salaried staff would receive a Christmas bonus of 35 percent of their annual pay. At Goldman Sachs brokerage house, the bonus would be 25 percent, and at the American Stock Exchange, l2.5 percent. Still, some of the joy was missing from the color- coordinated downtown toyland of white knights, blue chips, greenmail and golden parachutes.

″This time you knew the trouble hit close to home, because the jokes didn’t pop right out,″ observed Lloyd Fitzsimmons, polishing glasses behind the bar of St. Maggie’s Cafe at the river end of Wall Street. Here the brashest and the brightest of the new young breed of brokers wait for the ″rigger boats,″ the upscale ferries that take them to their parked Porsches and Jaguars on the Jersey side. ″Now they’re just beginning to trickle out.″

Fitzsimmons diplomatically couldn’t think of any at the moment. But ″Pops″ Gunnerson, the grizzled chestnut vendor on South Street who ″got out of the rat race more than a half-century ago″ when Richard Whitney, former president of the New York Stock Exchange, traded in his banker’s pinstripes for the wider-banded Sing Sing model, obliged with a few recent chestnuts.

″Drexel Burnham has switched from junk bonds to bail bonds.″

″Now the only safe place to deal is in the steam room of the Downtown Athletic Club where you know no one is wired.″

End Adv Sunday Dec. 21

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