SEC Action in Boesky Case

I was puzzled by the comment of Marshall E. Blume in his article (Editorial Pages, Nov. 25), “Boesky Case is No Reason for Open Season on Wall Street.” In his view, the power of the federal commission was proved by the “fact that the SEC was able to persuade Boesky to agree to plead guilty, pay $100 million and cooperate with its investigation.”

It is my view that the real question is whether or not the Securities and Exchange Commission properly used, or abused its power by the deal it permitted to be made, rather than to brag that it could “persuade” this crook to “agree” to it.

When I first learned of the government’s triumphant announcement that Ivan Boesky would be compelled to pay $100 million for illegally raiding great corporations, causing great injury to their stockholders, and to the public generally, I was elated that here, at last, was a punishment to fit the crime.

But then came the old familiar, dismal disillusionment. This felon was, as part of the bargain, allowed to unload his holdings over an extended period of time before anybody knew of his chicanery. When the story broke, thousands of small investors panicked, and took losses, as the market reacted to the news. Boesky, already had dumped $440 million of his securities at a profit of about the same $100 million he had to pay the government.

So the bargain he made with the government wasn’t such a good deal after all, except for Boesky. There isn’t the slightest doubt that the SEC had all the evidence it needed of Boesky’s guilt, so why the necessity to “persuade” the man to agree to a bargain in his favor? Surely the SEC has the means to discover his accomplices without help from this discredited individual.

The usual plea bargain is one in which the malefactor solicits an agreement from the prosecutor to consent to a reduced penalty for his crime, in return for an admission of his guilt. In this case, what benefit did the nation gain by a large fine, which the culprit was allowed to recoup before it had to be paid?

If this is an example of the manner in which justice is achieved by the actions of our representatives, I wonder what we shall learn after Atty. Gen. Edwin Meese III completes his prosecution, if any, of those in the Administration who have flaunted the laws pertaining to trading arms for hostages.

JOSEPH B. ALEXANDER

Laguna Hills