NEW YORK -- It was hard to believe that the man standing in the lobby of the tawny, modern skyscraper at 650 Fifth Avenue was really Ivan F. Boesky.

It was Tuesday, March 17 -- St. Patrick's Day -- and outside a thick crowd swarmed around the avenue, watching the annual parade. In the lobby, Boesky stood waiting for an elevator. He wore a golf cap over his long, silver hair, and though the day was sunny and mild, a parka hooded his body.

Since November, when details of his corrupt stock trading practices and record-setting settlement with the government were disclosed to a stunned public, Boesky had been coming to his mid-Manhattan office nearly every day.

While awaiting the elevator that Tuesday, Boesky said hello to a man who worked with him in the building. The man returned the greeting and then realized why Boesky was so heavily dressed. Because of the parade, Boesky had been unable to get across Fifth Avenue in his limousine. Apparently, the fallen speculator had decided to walk the last block to his office -- the golf cap and parka were a form of disguise.

It has come to that for Ivan Boesky, a man once celebrated for his financial success and now reviled by many as a symbol of Wall Street greed. As one of the country's best-known independent stock traders, Boesky sought out public attention; now, as a government informant, he is justifiably afraid to be recognized. Once possessed of a fortune exceeding $100 million, he now must mortgage artwork and property just to pay his taxes.

And yet, remarkably, the daily routine of the country's most notorious white collar criminal is in some ways little changed from the time before his disgrace.

Before the charges were lodged against him, Boesky was legendary for his 20-hour work days. Even after the charges were disclosed, he continued to spend hours each day helping to sell off the remnants of his once behemoth financial empire.

These days, while awaiting sentencing, Boesky still comes regularly to his expansive office to deal with lawsuits and other matters that have arisen since his guilty plea.

This working routine is part of a special arrangement made between Boesky and the government last fall -- a deal that has no precedent.

On Nov. 14, the Securities and Exchange Commission announced that Boesky had paid the government $100 million to settle charges that he traded stocks on the basis of confidential information about upcoming corporate takeovers. It also was disclosed that Boesky had agreed to plead guilty to one criminal count, carrying a maximum of five years in prison, and to provide investigators with fresh information about Wall Street corruption.

The SEC also barred Boesky from the securities business for life. As part of the arrangement, however, the government agreed to suspend the ban so that Boesky could participate actively in the systematic sell-off of his complex stock portfolio. Without Boesky, his firm could have been forced into bankruptcy, perhaps causing more than $1 billion of stock to be dumped onto the market at once.

"I think we accepted the wisdom of allowing Boesky to be in there for some transition period," SEC enforcement chief Gary Lynch said. "I think on balance it worked well."

What follows is the story of life inside the Boesky firm while it was being dismantled under government supervision. The account is based on interviews with many of the people who were there. For Boesky's dozens of employes, it was an emotional, often bewildering period. And for Ivan Boesky himself, it marked the beginning of an inevitable and difficult personal transformation. Breaking the News

On the afternoon of Nov. 14, Ivan Boesky, who was known as a stern and demanding boss, stood at the head of a marble conference table on the 34th floor of 650 Fifth Avenue and embraced his employes one by one.

Moments before, he had entered the crowded room to read a statement prepared by his lawyers. After apologizing and telling the dozens of gathered executives and support staff that what he was about to say was difficult, Boesky explained that he had settled insider trading charges by paying the government $100 million. He said that while the firm ultimately would be closed, it would continue in business for the foreseeable future.

Boesky told his staff that the government had given him 18 months, or until early 1988, to complete the liquidation of his stock portfolio. He asked for everyone's support. He also asked his staff to remember "the whole Ivan Boesky," not just the bad part.

"He said this in a strong voice," one employe recalled.

During a question-and-answer session, Boesky was asked if he would be allowed to buy stock. Buying some stock while selling off his holdings would help Boesky disguise the unloading of his $1.2 billion portfolio.

According to one person in attendance, Boesky answered, "Well, we can still buy, but we won't be doing any hostile takeover deals."

That answer, delivered without apparent irony, was typical of the attitude Boesky displayed toward his legal problems and the routine of his office during the first days and weeks after his settlement was announced. He seemed to believe that not much of consequence had really changed for him or his firm.

That afternoon, for example, Boesky made telephone calls to investors in his partnership and directors of the public companies he controlled. He told some of them that while his deal with the government would strip him of the right to own a stock brokerage firm, he hoped that he would be able to work with them again some day, perhaps as an investor.

The people who heard him say such things during the first days and weeks following the Nov. 14 announcement thought that Boesky was being unrealistic. And there were other signs around Boesky that the full impact of his admitted crimes did not settle in immediately.

On the Monday following the announcement, Boesky conducted his regular investment meeting just "As time went on, he became more in need of other people."

-- Former Boesky employe

before the stock market opened; it was as if there had been no newspaper headlines over the weekend, no crush of reporters seeking an interview, no shock waves across Wall Street. It was business as usual.

At the Monday meeting, one sign of change was the presence of Boston attorney Gerald Rath, who had been appointed by the SEC to monitor Boesky's stock sell-off. But Rath did not interfere with Boesky's working routine because the former speculator followed the government's trading guidelines.

Neither Boesky's routine nor his tough management style changed appreciably during this early period. After the stock market opened each day, Boesky would stand in his huge office suite, watching his stock traders and researchers on special television screens. Each of the employes had his own screen on which he could see Boesky -- but only if Boesky wanted it that way.

At the firm's morning meetings to plan the day's market strategy, Boesky continued to demand loyalty and hard work from his staff, even as the number of his employes began to dwindle from a peak of about 100.

Still intense and driven, Boesky sometimes digressed into brief fits of rage. One person who attended recalls that at a meeting in early December, Boesky demanded of a staffer who had failed to complete an assigned task: "How does it feel to be the only person in this room who has done anything wrong?" Again, the person said, there was no apparent irony in Boesky's voice.

In quiet ways, some of Boesky's employes began to fight back. Many were torn between feelings of betrayal and loyalty, bitterness and compassion. One executive regularly arrived late to meetings with his tie undone, a practice that would never have been tolerated in the days before Boesky's fall. The repeated tardiness appeared to rattle Boesky, who had no recourse but to accept it -- Boesky no longer controlled his employes' lives.

Slowly, in sometimes small ways, the magnitude of his settlement with the government was brought home to Boesky.

Before the end of 1986, the SEC secretly informed him that he would no longer be permitted to buy small blocks of stock. The SEC made this decision after members of Congress attacked the commission for allowing Boesky to sell millions of dollars of stock prior to the announcement of the charges against him.

There were personal setbacks as well. The Jewish Theological Seminary in Manhattan had been one of Boesky's favorite charities; in December, JTS expunged "The Ivan F. and Seema Boesky Family Library" inscription from the facade of the school's library.

Into the winter, Boesky remained mentally alert, people around him said, but his physical appearance began to deteriorate. Always lean, he became thinner, to the point of frailness. His hair grew longer and sometimes the shirts he wore to work were frayed.

There was pressure building on him from many sides. Press reports that he had secretly taped conversations with his Wall Street colleagues contributed to a public perception that Boesky had ratted on his friends. "One time I heard Ivan talk about wearing a wire and taping everyone," one person close to Boesky said. "He said, 'It goes with the territory. They're in the game. It is the risk you assume if you're going to do this kind of thing.' "

Despite the intense media coverage, on at least one occasion Boesky seemed to be amused by it all. "One time he did laugh," a person who worked with Boesky said. "The New York Daily News interviewed the guy in this greasy spoon on 52nd Street who said Ivan doesn't come in here for breakfast anymore. Ivan said he never went in there before, and he got a real kick out of that. He said he wouldn't be caught dead in there."

Conspicuously absent from Boesky's side at work during this period was the man said to be Boesky's closest friend and a confidential business adviser, Houshang Wekili. The Iranian executive had been one of the Boesky firm's highest-paid officials, earning more than $1 million a year. Wekili stopped coming to 650 Fifth Avenue even before the charges against Boesky were announced.

Wekili had always been a mystery to other Boesky executives; his absence only fueled more speculation. Wekili was also little known to the outside world. Though he attended Boesky's important business meetings, spent a lot of time with Boesky's family and traveled with the speculator by private jet in recent years, it had never been clear to staffers exactly what Wekili did for Boesky. The Iranian never openly displayed a firm grasp of his friend's arbitrage business; at meetings he appeared uninterested and sometimes fell asleep.

Other top executives began to leave Boesky's firm last winter, too. Some of them, such as former chief financial officer Reid Nagle, were unable to overcome the taint of working for Boesky and found it difficult to find new jobs. Nagle has sued Shearson Lehman Bros. Inc. for allegedly breaching an employment agreement reached prior to the disclosure of charges against Boesky.

As spring approached, Boesky assisted his lawyers in a complex negotiation that led to the release of $640 million in March to bondholders in his partnership. The event signaled the end of Boesky's role in supervising the stock sell-off -- by March, the portfolio had been reduced from about $1.2 billion to about $80 million. On May 20, the SEC made it official by formally barring Boesky from the securities business for life.

Boesky, finally, was without a huge stock portfolio to care for. When he tried to shift his attention to people, he was sometimes rebuffed. At one point, Boesky contacted Ernest W. Michel, executive vice president of the United Jewish Appeal in New York, to inquire about participating in volunteer work. (Such community service typically is pursued by a person awaiting sentencing, in part to influence the judge.) Boesky had been a major contributor to UJA and had served as its fund-raising chairman in the past.

Michel gave Boesky a list of agencies supported by UJA. "I talked to him on the phone," Michel said recently. "He wanted to do a service job, spending his free time helping people, older people, sick people, younger people. What he wanted to do was be, say, in a hospital or in an old age home.

"From what I understand," Michel added, "they turned him down."

A Slow Decline

Over the last seven months, as the trappings of his wealth and position have been slowly stripped away, those who know Ivan Boesky well think they see a change in him.

In the days before his fall, Boesky sometimes seemed to be an extension of the elaborate technology in his Manhattan office -- he seemed to be the human component of a dazzling, money-making machine.

In his vast suite on the 34th floor of 650 Fifth Avenue, Boesky surrounded himself with the bells and whistles of modern finance. Built into his desk was a switchboard with 160 direct phone lines to brokers and traders. Boesky spent most of his days standing before this labyrinth, rocking from one foot to the other, talking into two or more phones cradled against his chin.

Behind him was a bright, electronic ticker tape displaying stock "He wasn't a bad man, just not a very good wizard."

-- Boesky associate

trades. Then, too, there was the system of TV screens and cameras that allowed Boesky to survey his employes.

These days, when Boesky comes into his office, he still works behind his oversized desk. But now his suite is a kind of empty hull; the machines have been taken away. The electronic ticker is gone, and so is the Orwellian video system. The huge switchboard in his desk remains -- Boesky owns it -- but only a handful of the 160 phone lines are still connected.

One person close to the Boesky organization said that as the office machinery was carted off, it was as if the real Ivan Boesky became visible for the first time. This person compared the transformation to the scene near the end of the movie "The Wizard of Oz" when the curtain is pulled back and the fire-breathing, "great and powerful Oz" is revealed as a two-bit carnival promoter from Kansas.

"He wasn't a bad man," this person said of Boesky, "just not a very good wizard."

While he awaits sentencing, scheduled for August, Boesky has arranged for temporary access to his office to work on the litigation that has arisen from his guilty plea. He lives much of the time in a fashionable cooperative apartment on East 56th Street in Manhattan.

Though the 50-year-old Boesky has hardly been forced into the poorhouse, there are signs that he is struggling with his personal finances. Much of the wealth he retained after paying the government $100 million was not "liquid," or readily convertible to cash. As April 15 approached, for example, Boesky did not have enough cash available to pay his considerable tax bill.

According to documents and people familiar with the transaction, Boesky was forced to borrow $2 million from his wife, Seema, in order to pay his income taxes. (Seema Boesky has always been independently wealthy, and the government concluded when it prosecuted her husband that it had no claim on her assets.)

Seema Boesky's lawyers insisted that Boesky put up security for the loan. So Boesky mortgaged a home he owns as well as his interest in five sculptures by Aristide Maillol and a collection of rare Jewish books.

Documents describing the transaction, signed by Seema and Ivan Boesky, list separate addresses for the couple: Boesky at the 56th Street Manhattan apartment, Seema at the family estate in Westchester, which she has always owned in her name. (Lawyers for both insist that neither a divorce nor a legal separation is in the works, and the Boeskys marked their 25th anniversary earlier this year.)

All of this -- Boesky's dwindling bank accounts, the pressure of taxes, the rebuffs from charities he once supported, his emptied office on the 34th floor -- have produced an interesting change in the man once nicknamed "Piggy" by his Wall Street competitors.

The bravado he displayed during the first weeks after his settlement was announced, when Boesky talked openly about returning to the securities business as an investor, has largely disappeared, people close to him say. Gone, too, is the feverish energy that surrounded his 20-hour work days and made him a demanding boss.

No longer able to derive satisfaction from speculating in takeover stocks, the new Boesky is described as deeply philosophical, always asking those around him what it takes to be happy. Sometimes he will ask the question directly and almost out of the blue: "You seem to be a happy, stable person -- what is it you do that makes you so?"

For all the time he spent on the telephone, people close to him say, Boesky never cultivated many deep friendships. After his disgrace, almost all the people he had talked to regularly stopped taking his calls -- some were afraid, others were disgusted. "As time went on, he became more in need of other people," says a former employe who left the Boesky firm recently. "He had never really needed other people. It was the first time, and I think he had difficulty coming to grips with that."

The people who have spent time with him over the last seven months acknowledge that Boesky has not miraculously been turned into an angel. They say the change in him has happened slowly and that it is incomplete.

After Boesky's prison sentence is handed down, the biggest change of all may yet await him.