A former top aide to stock speculator Ivan F. Boesky yesterday accused Shearson Lehman Bros. Inc. of reneging on an employment agreement last year after it learned that Boesky would pay the government $100 million to settle insider stock trading charges.
In a lawsuit filed in state court in New York, Reid Nagle, formerly the chief financial officer at Ivan F. Boesky & Co., said that Shearson improperly backed out of a deal to hire him as a managing director of the investment banking firm. Nagle is seeking more than $1 million in damages, including more than $500,000 he says was due him under the employment agreement.
Shearson declined to comment on the lawsuit.
In his complaint, Nagle said that Shearson approached him to discuss employment in August 1986, about three months before the charges against Boesky were announced. Nagle said that he met with Shearson executives during August and October to talk about a job with Shearson.
On Nov. 4, 10 days before Boesky's settlement was announced, a Shearson managing director wrote to Nagle, saying that it was "a pleasure to confirm our offer of employment." The letter set out a base salary of $140,000 per year, plus another $400,000 in bonuses annually.
Nagle said that around the time he received Shearson's letter, he informed the firm that he had learned of a possible Boesky settlement with the SEC. Nagle said he suggested to Shearson that a formal announcement of his employment be delayed until after disclosure of sanctions against Boesky.
According to Nagle, Shearson rejected that suggestion and said that they wanted to announce Nagle's hiring before any enforcement action against Boesky was disclosed "in order to avoid any adverse publicity to Shearson." Shearson disclosed Nagle's hiring in an interview with a trade publication on Nov. 7.
But on Nov. 28, two weeks after Boesky's settlement was disclosed, Shearson advised Nagle not to begin work on Dec. 1 as previously agreed, the lawsuit alleged. On Dec. 8, Shearson told Nagle that it would not honor the employment agreement, Nagle said.