Word: sec
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Dates: during 1980-1989
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...addition to the individuals, Drexel Burnham as a corporation was subpoenaed by the SEC and by a federal grand jury. For the past two years Drexel Burnham has been Wall Street's most profitable investment firm; its 1985 gross earnings were an estimated $1.1 billion. In a bid to head off a run on accounts held with the company, Drexel Burnham declared it was "providing information" to investigators and emphasized that it "will not condone or tolerate any activities which violate the integrity of the markets...
Meanwhile, the stock market suffered some profound jitters of its own. On the day after disclosure of the SEC subpoenas, the Dow Jones index of 30 blue- chip industrial stocks plummeted 43.31 points, to 1,817.21, the fourth largest drop on record. If anything, the Dow understated the market's nervous collapse. On the New York Stock Exchange, 1,390 issues fell that Tuesday, and only 283 gained. Many of the hardest hit were stocks that had been heavily traded by speculators in the anticipation of takeover action. Later in the week, as opportunistic traders saw many stocks as bargains...
Even amid that recovery, however, many Wall Streeters were livid to discover that Boesky and the SEC had apparently collaborated in what many considered another stock-trading outrage. Prior to the Nov. 14 announcement of his penalties, Boesky had been allowed by the federal regulators to unload quietly some $440 million in stocks from the estimated $2 billion worth of portfolios he controlled. In effect, Boesky avoided the market slump caused by the news of his own spectacular downfall. Steamed one senior Wall Street trading executive: "This was the ultimate insider deal." Raged another investor: "It's incredible! This...
...week's end the SEC offered a defense of the $440 million sell-off. Boesky's action was legal, the commission declared, and the regulators had been fully aware of it. The SEC realized there was a danger of a stock-market slide after the announcement of the action against Boesky. If that happened, Boesky would have been forced because of margin debts on his stock accounts to liquidate huge amounts of securities quickly. That could have sent the market into a steeper downward spiral. The SEC apparently decided it would be better for Boesky to dispose of some...
...meeting Boesky read a brief statement essentially apologizing for his actions, then handed the three- to four-hour session over to his legal advisers. They explained that the fund would be liquidated as part of Boesky's agreement with the SEC to remove himself from stock-trading activities over the next 16 1/2 months. Said Lewis Lehrman, a former Republican gubernatorial candidate in New York State, who had plunked down $1 million on Boesky's speculative endeavors but who skipped the session: "I would say that Mr. Boesky disappointed a lot of people, me included...