Gordon Gekko

[naz9403]

And then there is boiler room.

What's funny about boiler room is that there are really people out there who think being a stockbroker is really sweet.

During my training to be a stockbroker i kept referring to bud fox's quote "one day i'm going to be on the other side of that phone." I just can't be an upscale car salesman so i quit. I'd rather be a lemming in a cubicle and trade my way to becoming a whale after work.

 

[DannoXYZ]

Yeah, being a stockbroker is just one step above being a slimy used-car salesman. I couldn't ethically stay in that business knowing what we were pushing on the clients.

Quote from Eliot Hosewater:
But lying about trading on insider info is a crime - just ask Martha Stewart.

Quote from William Rennick:
Martha Stewart might strongly disagree

She actually got busted on 4 charges of "obstruction of justice", "making false statements" and "conspiracy to make false statements" by shredding documents and telling her broker and assistants to lie to investigators. That's what she was convicted of and went to jail for. There was no "insider trading" violation of any sort. If she had been up-front and not done that, nothing would've happened, except that her broker would've been busted if it turned out he used inside-info to help her out.

 

[Mike805]

Quote from Hydroblunt:

Ivan Boesky and Michael Milken were the role models for Gordon Gekko. Milken did some shady sh*t in the bond markets with inside info which I think Boesky supplied him. Don't remember the full story, but you can look it up on wikipedia and the web.

Boesky is the closer guy to Gekko cause he came up almost from the street with pure hunger which made him do it anything it took to get those dollars. But Milken, who was the junk bond king, had to do some serious BS to have the law finally crack down on him.

Other way around. Boesky was Miliken's bitch, as was Drexel, Lambert, Burnham and numerous other high profile Wall Street firms/IBanks. Miliken was able to pressure/extort his clients via clever market making. He sat on both sides off most deals and essentially set the spread as high as he could.

EDIT: This wasn't necessarily illegal.

What brought Miliken down was an insider trading investigation that took initially took down some low level heads at Merrill Lynch. But as the SEC dug deeper they were eventually lead to Miliken via Boesky (Boesky essentailly set-up Miliken for a fall).

I read in numerous places that Boesky was the role model for Gekko. Boesky was quoted at a graduation ceremony with the famous "Greed is Good" line.

 

[trader1966]

I never figured out what Gekko did for a living either. Is he a hedge fund manager, a private investor, a money manager or what ? The funniest thing about the movie is how Bud went from borrowing money from a co-worker to a penthouse with one client. No one and I mean no one makes that much money on a single account.

I also liked the scene in the restaurant when Gekko handed Bud a check for $1,000,000 to invest. Hell even in the 1980's that was nothing. Bud would have been lucky to clear $5000 in commission.

 

[Cheese]

Quote from trader1966:
I never figured out what Gekko did for a living either. Is he a hedge fund manager, a private investor, a money manager or what ? The funniest thing about the movie is how Bud went from borrowing money from a co-worker to a penthouse with one client. No one and I mean no one makes that much money on a single account.

I also liked the scene in the restaurant when Gekko handed Bud a check for $1,000,000 to invest. Hell even in the 1980's that was nothing. Bud would have been lucky to clear $5000 in commission.

The film sets a scene and a perception of power and money making; it is not meant to be precise about the exact mechanics of how Gekko makes money though the drift is always plain enough. He rides on targets for takeover & creams off tens of millions. Indeed Wildman calls him to his face, "You're a two bit pirate and a green-mailer, Gekko, nothing more..."

 

[Hydroblunt]

Quote from Mike805:

Other way around. Boesky was Miliken's bitch, as was Drexel, Lambert, Burnham and numerous other high profile Wall Street firms/IBanks. Miliken was able to pressure/extort his clients via clever market making. He sat on both sides off most deals and essentially set the spread as high as he could.

EDIT: This wasn't necessarily illegal.

What brought Miliken down was an insider trading investigation that took initially took down some low level heads at Merrill Lynch. But as the SEC dug deeper they were eventually lead to Miliken via Boesky (Boesky essentailly set-up Miliken for a fall).

I read in numerous places that Boesky was the role model for Gekko. Boesky was quoted at a graduation ceremony with the famous "Greed is Good" line.

Thanks for the correction, I did not fully remember the details.

Boesky is much closer to Gekko than Milken but it was more of the combination of two, since they collaborated together.

Milken was somewhat rogue, thats why SEC could go after him. The deals he was doing to Timewarner, Revlon and others that he was also cited for, were full of immense conflicts of interests. However, Goldman Sachs just did the same with Refco and NYSE/Arca. Funny how that works.

 

[Rearden Metal]

Quote from naz9403:



Used illegal information to perform hostile takeovers to liquidate companies for profit. I'm sure many of you will have a laugh for my misunderstanding of the world of equities and big money take overs but can anyone out there clarify what exactly he did and if it's possible to do it legally?

The word you're looking for here is <b>LBO</b>http://en.wikipedia.org/wiki/Leveraged_buyout.

In simple terms, when a company trades well below book value, a corporate raider gets the financing together to buy out a controlling stake in the company. He then liquidates the company's assets for a profit. He wins, but many workers jobs are often lost in the process. You don't need illegal inside info to conduct an LBO.

Another movie about LBO's (not nearly as good as Wall Street):

<img src=http://www.impawards.com/1991/posters/other_peoples_money.jpg>

 

[naz9403]

Thanks for the replies.

I was 3 yrs old when Wall Street came out, so kinda missed the whole decade and what was going on.

I invested in "Den of Thieves" Should explain all the naughty actions of the 80's.

 

[fullblotter]

I read "den of thieves". it was entertaining but I found it heavily, heavily biased in favour of the government.

if you get a chance, check this book out:

Payback: The Conspiracy to Destroy Michael Milken and His Financial Revolution
by Daniel R. Fischel

"Junk-bond pioneer Michael Milken, who was convicted in 1990 of unlawful stock transactions and spent two years in prison, actually committed no crimes at all, contends Fischel, a University of Chicago economist and consultant whose clients have included Milken and other Wall Street figures. The 1980s' wave of hostile takeovers and leveraged buyouts that was spearheaded by Milken made his now defunct firm, Drexel Burnham Lambert, the most profitable investment bank. In Fischel's provocative analysis, such old-line Wall Street firms as Lazard Freres, Salomon Brothers and Dillon, Read, thirsting for revenge and eager to restore their diminished positions, joined forces with big labor, which feared a massive loss of jobs, to instigate a government-backed witch hunt that scapegoated Milken and other high-rolling investors such as John Mulheren Jr., Boyd Jefferies and Robert Freeman. In ambitious U.S. Attorney Rudolph Giuliani (now NYC mayor), this coalition found an ally who waged an ill-informed, unscrupulous assault on the junk-bond industry, writes Fischel, who contends that the overzealous government redefined routine, even beneficial trading practices as illegal. This is a remarkable, bound-to-be-controversial reappraisal of the so-called financial revolution of the 1980s. "

 

[Cheese]

Quote from fullblotter:
I read "den of thieves". it was entertaining but I found it heavily, heavily biased in favour of the government.

if you get a chance, check this book out:

Payback: The Conspiracy to Destroy Michael Milken and His Financial Revolution
by Daniel R. Fischel

"Junk-bond pioneer Michael Milken, who was convicted in 1990 of unlawful stock transactions and spent two years in prison, actually committed no crimes at all, contends Fischel, a University of Chicago economist and consultant whose clients have included Milken and other Wall Street figures. The 1980s' wave of hostile takeovers and leveraged buyouts that was spearheaded by Milken made his now defunct firm, Drexel Burnham Lambert, the most profitable investment bank. In Fischel's provocative analysis, such old-line Wall Street firms as Lazard Freres, Salomon Brothers and Dillon, Read, thirsting for revenge and eager to restore their diminished positions, joined forces with big labor, which feared a massive loss of jobs, to instigate a government-backed witch hunt that scapegoated Milken and other high-rolling investors such as John Mulheren Jr., Boyd Jefferies and Robert Freeman. In ambitious U.S. Attorney Rudolph Giuliani (now NYC mayor), this coalition found an ally who waged an ill-informed, unscrupulous assault on the junk-bond industry, writes Fischel, who contends that the overzealous government redefined routine, even beneficial trading practices as illegal. .."

Exactly.