Ivan Boesky plays the takeover game like nobody else on Wall Street. The question is, does he play fair?

When Boesky buys stock during a takeover battle, he does not sit idly by to see if its price moves up or down. Because of the enormous size of the positions he takes -- sometimes as much as $250 million -- Boesky is often able to dictate the action, or at least influence it.

"Our presence in a deal will have some impact on the ultimate outcome of where our stock will trade because of the way we handle ourselves and our securities," he says. "We are there investing our capital and standing behind our investment wanting certain things to occur, and hoping that our presence will in some fashion help cause the price to rise ."

Boesky's activism during one major deal earlier this year -- the attempted takeover of Phillips Petroleum Co., first by T. Boone Pickens Jr. and later by Carl Icahn -- has raised both legal and ethical questions. Wall Street sources and Phillips officials have confirmed that the Securities and Exchange Commission is investigating the deal for possible trading violations. The SEC refused to confirm or deny that an investigation is taking place; Boesky and Icahn refused comment as well.

Questions have arisen because of sworn testimony given by Icahn last February to Phillips lawyers during a lawsuit filed by Phillips against Icahn.

Icahn testified that during a month-long period prior to the public announcement that Icahn intended to seek control of Phillips, Boesky called Icahn "every day." During this period, Boesky owned as many as 5.87 million Phillips shares. He was facing huge potential losses because of Pickens' earlier decision to abandon his bid for control of Phillips -- that decision had caused the price of Phillips stock to drop by almost 10 points.

Anxious to boost the depressed price of his Phillips shares, Boesky met privately with Icahn three times to discuss alternatives, including a possible joint bid for Phillips, according to Icahn's testimony. On Jan. 28, 1985, a week before Icahn publicly announced his attempted takeover of Phillips, Boesky sold Icahn 2.7 million Phillips shares. According to Icahn, sometime between Jan. 28 and Feb. 9, when the pair met for dinner at Icahn's estate, Boesky bought "4 to 5 million" Phillips shares.

It is not known whether Boesky bought those shares before or after Icahn's public takeover announcement, which raised the price of Phillips' stock. Securities rules require that any person who possesses material, nonpublic information about a tender offer or proposed tender offer disclose the information publicly or refrain from trading. The requirement applies only if a person knows, or has reason to know, that the information has been obtained directly or indirectly from the bidder, the target company or their respective insiders.