Judge Fines Boyd Jefferies $250,000 for Aiding Boesky : Placed on Probation for 5 Yrs.
Boyd L. Jefferies, the former Los Angeles stockbroker who helped bring about some of the largest U.S. corporate takeovers, was spared a prison term today but was fined $250,000 for helping Ivan F. Boesky file false records.
Jefferies, 58, also was sentenced to five years’ probation, although he can ask to have that reduced after three years. He is barred from the securities industry but can apply to re-enter it five years after his probation ends.
U.S. District Judge Morris Lasker said he issued the suspended sentence partly because of Jefferies’ lengthy cooperation with government prosecutors.
“Mr. Jefferies has by now earned his way through agony and effort to a suspended sentence,” Lasker told a packed room at U.S. District Court in Manhattan that burst into applause after the judge departed.
But Lasker added a message he addressed to the financial community: “It is absurd and probably obscene for any person so engaged to undertake acts which will possibly bring him greater riches. I hope you will go out and be a missionary for plain, ordinary decent conduct.”
Jefferies faced a maximum sentence of 10 years in prison and $500,000 in fines.
Government Witness
He was a government witness in securities cases against GAF Corp. and Singer Co. Chairman Paul Bilzerian, who was convicted of securities fraud last month. He is also expected to testify against investor Salim Lewis later this year.
Jefferies’ voice broke as he apologized. “Your honor,” he said, “I want to take this opportunity to apologize to the court, to apologize to the government, to apologize to my friends and family who have given me so much support. . . . I sincerely want to apologize for the seriousness of my actions.”
The former brokerage chief said later that even he was surprised by the sentence. “I was expecting much worse,” he told reporters outside the courtroom.
Jefferies said he hopes to return someday to Jefferies & Co., the Los Angeles-based brokerage that he founded and that pioneered off-hours trading in stocks.
Boyd Jefferies’ firm was a favorite of corporate raiders, and its client list included such names as Carl Icahn, T. Boone Pickens, Robert Campeau and Victor Posner.
Accused of ‘Parking’ Stocks
The sentencing took place more than two years after Jefferies pleaded guilty to two counts of securities fraud in April, 1987. One of those counts involved “parking” stocks for Boesky, once Wall Street’s most powerful stocks speculator. Parking is an illegal strategy in which one party holds stock for another to hide its ownership.
Lasker said that Jefferies’ crimes were less serious than those of Boesky, who was sentenced by Lasker in December, 1987, to three years in prison for criminal conspiracy.
The other count charged Jefferies with helping Lewis in an alleged scheme to manipulate the stock price of Fireman’s Fund Corp. In that charge, Jefferies was accused of stock margin violations by extending full credit to Lewis.
Manhattan U.S. Atty. Benito Romano told the court that Jefferies’ cooperation was “exemplary.”
Under the 1987 plea agreement, Jefferies left the securities business, but the firm remained open with James Melton, who was implicated in the alleged GAF stock manipulation scheme, as head trader.
