"Boesky Pays $100 Million as Penalty"..."Boesky Barred From Securities Trading for Life"...

IF YOU WERE Ivan Boesky, wouldn't you think that these headlines were terrible? Your worst nightmare? Well, Ivan probably knows the truth would be still worse: "Boesky Gets Away With Murder."

He didn't kill anyone. But what seems obscured by the financial community, and perhaps even the press, is that he is a common--or rather, uncommon--criminal who is barely even getting slapped on the wrist.

Boesky, known for the last four years as the country's most powerful arbitrageur, is now also known as the largest offender of his profession's mortal sin, insider trading.

Arbitrage used to mean the practice of profiting from the difference between the buying and selling price of stocks. But in the last several years a much more glamorous and speculative form has emerged, known as "risk arbitrage." Stock is still bought and sold, but the trend is to concentrate on companies undergoing some sort of restructing--for example, a merger or acquisition. In essence, it is a short term, high risk gamble that change will occur and hence influence the price of stock.

There is nothing wrong with this; there are many reputable firms who engage in arbitrage. Economists may even venture that arbitrage is essential in promoting a more efficiently functioning market.

But Ivan wasn't promoting efficiency--he was promoting himself. He was able to know which number the ball would land on before the roulette wheel was even spun. His competitors were simply playing the odds--as far as we know.

THIS MAY NOT SEEM so morally heinous, but in fact it is complex form of robbery. But even more important are its effects. Scenario: everybody breaks the rules of Wall Street...chaos ensues...capital is unavailable to allow companies to grow and function, leading to...Economic Breakdown! Well, this may be extreme, but if we decide to let one person get away with breaking the rules, what deterrent is there to stop others?

We can and should liken Ivan Boesky with the gangsters who fix the crap games. Both seem to have a knack for reducing the imposed sentence, if not escaping its very intent. Furthermore, with both types of crime the victim is unaware of being--a victim.

The public is now aware that Ivan paid an astounding $100 million penalty. What is astounding is not his loss, but both the tax break he receives and the net effect which still leaves him with a current worth of between $100 and $200 million--probably accrued from arbitrage and perhaps more undetected insider trading.

What is also astounding is the fact that the Securities and Exchange Commission (SEC) has given him nearly two years, until April 1, 1988, to withdraw from the U.S. market. Too much time and consequently too much unfair profit. And after that he is free to practice his profession in Europe, excluding London. Yet the most astounding fact is that Boesky, with tacit SEC permission, sold off $440 million of his holdings before the announcement of his censure. He traded with inside information again. This time he was his own source.

He just can't seem to learn a lesson, because he is hardly being punished. One would think that Dennis Levine, who "pushed the domino over" for Boesky when he was busted for insider trading to the sum of $12.5 million, would be a portrait of leniency when compared to Boesky's case. Levine is now awaiting sentencing which could place him in jail for 25 years.

Ivan faces a felony charge too, but it can only burden him with five years in jail. Does more money mean a lighter sentence? More likely, Ivan continued his dealings, "knocking the domino over" on someone else as of yet unannounced.

Boesky may have to go to jail. But in all likelihood his biggest trouble may come from coping with a societal snub, when he will have to resign from prestigious boards and clubs. But even this will probably be short-lived, as money always seems to make friends and influence people.

So for the time being, Ivan will just have to incarcerate himself at his $10 million estate and continue to play with an inordinate sum of money. Unfortunately, the $100 million slap on the wrist will not prevent him from playing squash. At best his concentration could be broken by the pending lawsuits and an outbreak of public fury.