Michael Robert Milken

Born:	July 4, 1946 (1946-07-04) (age 61) Encino, California, USA
Occupation:	financier, philanthropist
Net worth:	US$2.1 billion (2007)[1]
Website:	http://www.mikemilken.com/

Michael Robert Milken, born July 4, 1946, in Encino, California, is an American financier best known as the "Junk Bond King" of 1980s era Wall Street. He was highly influential in developing the market for junk bonds (a.k.a. "high-yield debt") during the 1970s and 1980s, which in turn fueled the 1980s boom in corporate raids and hostile corporate takeovers. He has been called both a financial innovator and the epitome of 1980s Wall Street greed. Image File history File linksMetadata Download high-resolution version (313x786, 42 KB) File links The following pages on the English Wikipedia link to this file (pages on other projects are not listed): Michael Milken Rudy Giuliani Metadata This file contains additional information, probably added from the digital camera or scanner... is the 185th day of the year (186th in leap years) in the Gregorian calendar. ... Year 1946 (MCMXLVI) was a common year starting on Tuesday (link will display full 1946 calendar) of the Gregorian calendar. ... Image File history File links No higher resolution available. ... Encino is a neighborhood of the City of Los Angeles, California located in the San Fernando Valley. ... Financier (IPA: /ˌfi nãn ˈsjei/) is an elegant term for a person who handles large sums of money, usually involving money lending, financing projects, large-scale investing, or large-scale money management. ... A philanthropist is someone who engages in philanthropy; that is, someone who donates his or her time, money, or reputation to a charitable cause. ... Image File history File links No higher resolution available. ... is the 185th day of the year (186th in leap years) in the Gregorian calendar. ... Year 1946 (MCMXLVI) was a common year starting on Tuesday (link will display full 1946 calendar) of the Gregorian calendar. ... Encino is a neighborhood of the City of Los Angeles, California located in the San Fernando Valley. ... Elaborate marble facade of NYSE as seen from the intersection of Broad and Wall Streets For other uses, see Wall Street (disambiguation). ... High yield debt (non-investment grade or junk bond) is a business term referring to a corporate debt instrument, usually a bond, that has a higher yield (compared to investment grade debt) because of a high perceived credit risk (default risk). ... A corporate raid is a business term, sometimes also referred to as breaking a company. ... A takeover in business refers to one company (the acquirer, or bidder) purchasing another (the target). ...

Milken was indicted on 98 counts of racketeering and fraud in 1989 as the result of an insider trading investigation. After a plea bargain, Milken was charged with six securities and reporting violations. He was sentenced to ten years in prison, but was released after less than two years. He then launched a public relations campaign to highlight his role as a financial innovator, particularly with regard to popularizing higher-risk alternative investments. He also devoted much time and money to charity over the past three decades. With an estimated net worth of around $2.1 billion as of 2007, he is ranked by Forbes magazine as the 458th richest person in the world.^[1] This article or section does not adequately cite its references or sources. ... Forbes magazine annually lists the worlds wealthiest individuals: The Worlds Billionaries. ...

Education

Milken is a graduate of Birmingham High School, where his classmates included actresses Sally Field and Cindy Williams Sally Margaret Field (born November 6, 1946) is a two-time Academy Award winning American actress . ... Cindy Williams (born August 22, 1947) is an American actress // Born Cynthia Jane Williams in Van Nuys, California to John and Lillie Williams. ...

A summa cum laude graduate of the University of California, Berkeley, where he was elected a member of Phi Beta Kappa, Milken went on to receive his master's degree in Business Administration from the University of Pennsylvania Wharton School. Latin honors are Latin phrases used to indicate the level of academic distinction with which an academic degree was earned. ... Sather tower (the Campanile) looking out over the San Francisco Bay and Mount Tamalpais. ... This article is about the private Ivy League university in Philadelphia. ... The Wharton School of the University of Pennsylvania is a business school at the University of Pennsylvania, USA. The school was founded by Joseph Wharton, who also was one of the founders of Swarthmore College (founded in 1864), in 1881 as the first collegiate business school in the United States. ...

While at the Wharton School, he was influenced by credit studies authored by W. Braddock Hickman, a former president of the Federal Reserve Bank of Cleveland, who noted that a portfolio of non-investment grade bonds offered "risk-adjusted" returns greater than that of an investment grade portfolio. W. Braddock Hickman President Federal Reserve Bank of Cleveland May 1, 1963 to November 28, 1970 (died in office) Mr. ...

Career

In January 1969 Milken went to work for Drexel Harriman Ripley as assistant to the chairman.

When Drexel merged with Burnham and Company in 1973, Milken headed the non-investment-grade bond department, an operation that earned a remarkable 100% return on investment. By 1976, Milken's income was estimated at $5 million a year. In 1978, Milken returned to his home state of California. During the 1980s he became known as a controversial financial innovator whose work at the investment bank of Drexel Burnham Lambert greatly expanded the use of high yield debt (junk bonds) in corporate finance and mergers and acquisitions, which in turn fueled the 1980s boom in leveraged buyouts, hostile takeovers, and corporate raids. In finance, the return on investment (ROI) or just return is a calculation used to determine whether a proposed investment is wise, and how well it will repay the investor. ... Income, generally defined, is the money that is received as a result of the normal business activities of an individual or a business. ... Drexel Burnham Lambert was one of the most profitable Wall Street investment banking firms during the late 1970s and most of the 1980s. ... High yield debt (non-investment grade or junk bond) is a business term referring to a corporate debt instrument, usually a bond, that has a higher yield (compared to investment grade debt) because of a high perceived credit risk (default risk). ... Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... This article or section cites very few or no references or sources. ... A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ... A takeover in business refers to one company (the acquirer, or bidder) purchasing another (the target). ... A corporate raid is a business term, sometimes also referred to as breaking a company. ...

He was a major contributor to the success of Drexel, which went from $1.2 million in fees to over $4 billion during Milken's time there, making it the most profitable firm on Wall Street at the time. Such was Milken's importance to the success of Drexel's ventures, he was given huge salaries and bonuses, one year earning in excess of $500 million. According to James B. Stewart's Den of Thieves, however, Milken "earned" this massive sum because, as head of Drexel Burnham Lambert's Beverly Hills operation, he was in charge of the distribution of that office's bonus pool. The bonus pool that year (1986) amounted to about $700 million. After giving out about $150 million to his Beverly Hills colleagues, Milken just kept the remaining $550 million for himself, despite indicating to one colleague that Milken's take would be $10 million. Milken's take was even more than the whole 10,000-person company's profit that year ($522.5 million). Elaborate marble facade of NYSE as seen from the intersection of Broad and Wall Streets For other uses, see Wall Street (disambiguation). ...

In June 1989, Milken resigned from Drexel to form his own company, International Capital Access Group.

Insider trading scandal

In 1989, Rudy Giuliani, then the U.S. Attorney for the Southern District of New York, charged Milken under the RICO act with 98 counts of racketeering and fraud. Milken was indicted by a federal grand jury. He agreed to a plea bargain after the U.S. Government froze his and his family's assets and threatened to pursue charges against his family. This was one of the first times RICO was used against an individual outside of organized crime. Milken pled guilty to six securities and reporting felonies in 1990^[1]: Rudolph William Louis Giuliani III, (born May 28, 1944) is an American lawyer, prosecutor, businessman, and Republican politician from the state of New York. ... United States Attorneys represent the U.S. federal government in United States district court. ... The Racketeer Influenced and Corrupt Organizations Act (commonly referred to as RICO) is a United States federal law which provides for extended penalties for criminal acts performed as part of an ongoing criminal organization. ... Organized crime is crime carried out systematically by formal criminal organizations. ... In the common law legal system, an indictment is a formal charge of having committed a serious criminal offense. ... A grand jury is a type of jury, in the common law legal system, which determines if there is enough evidence for a trial. ... A plea bargain (also plea agreement, plea deal or copping a plea) is an agreement in a criminal case in which a prosecutor and a defendant arrange to settle the case against the defendant. ...

1. He planned or thought to engage in a series of unlawful security transactions.
2. He engaged in tax fraud. The charge relates to Ivan Boesky’s false 13-d statement.
3. He advised Ivan Boesky to buy MCA stock in order to hide the fact that Milken's client Golden Nugget Companies was selling MCA, and to assure him no loss in a sale to Drexel.
4. He helped a client reduce his income tax liability by selling the client two investments and then buying them back at a lower price.
5. He failed to make a written disclosure of an agreed-upon adjustment in transaction prices between Drexel and a client.

At Milken's sentencing, Judge Kimba Wood told him: Ivan Frederick Boesky (born March 6, 1937, in Detroit) was notable for his prominent role in a Wall Street insider trading scandal that occurred in the United States in the mid-1980s. ... Ivan Frederick Boesky (born March 6, 1937, in Detroit) was notable for his prominent role in a Wall Street insider trading scandal that occurred in the United States in the mid-1980s. ... Golden Nugget Companies Inc. ... Kimba Wood (born 1944) is a U.S. federal judge. ...

You were willing to commit only crimes that were unlikely to be detected.... When a man of your power in the financial world... repeatedly conspires to violate, and violates, securities and tax business in order to achieve more power and wealth for himself... a significant prison term is required.

Wood recommended a 10-year prison sentence, of which, in her opinion, Milken should have served at least 36 to 40 months. However, Milken served only about 22 months (from March 1991 until January 1993) before being released. Upon his release, he still had net worth of over $1 billion, despite having paid a total of $900 million in fines and settlements^[1], relating primarily to civil lawsuits. As of 2007, Milken is worth about $2.1 billion and has long since entered other business ventures.

Milken was also banned for life from the securities industry.

In 1998, without admitting any guilt, he returned $47 million in fees to settle an SEC charge related to the 1991 order barring him from the securities industry. He allegedly breached the order when he advised MCI/News Corporation in a transaction in 1995, for which he received $27 million in advisory fees, and when he advised Revlon chairman Ronald Perelman on a Revlon/New World Communications deal in 1996, with $15 million in fees to Milken. In 1996, he received $50 million when Time Warner acquired Turner Broadcasting. The SEC did not bring up the last deal in the charge. MCIs original corporate logo MCI Communications was an American telecommunications company that was instrumental in legal and regulatory changes that led to the breakup of the AT&T monopoly of American telephony. ... 1211 Avenue of the Americas (Sixth Avenue), where News Corporation is based News Corporation (abbreviated to News Corp) (NYSE: NWS, NYSE: NWSa, ASX: NWS, LSE: NCRA) is one of the worlds largest media conglomerates. ... Revlon (NYSE: REV) is an American cosmetics company. ... Ronald Owen Perelman (born January 1, 1943) is an American billionaire investor that made his fortune buying beleaguered corporations and re-selling them later for enormous profits. ... Revlon (NYSE: REV) is an American cosmetics company. ... New World Pictures logo from the late 1980s; New Worlds other divisions used similar logos New World Communications was a major television production company and television station owner in the United States from the late 1980s to the mid-1990s. ... Time Warner Inc. ... Turner Broadcasting logo Turner Broadcasting System (often abbreviated to Turner), based in Atlanta, Georgia, USA, is the company managing the collection of cable networks and properties started by Robert Edward Ted Turner from the mid-1970s to the late-1990s. ...

Philanthropic activities

Milken has a long record of philanthropic activity but detractors have suggested that this activity is, at least in part, motivated by a desire to rehabilitate his public image.

In 1982, Milken and his brother Lowell founded the Milken Family Foundation to support medical research and education. Through the Milken National Educator Awards (founded in 1985), the MFF has awarded a total of about $54 million to more than 2,000 teachers.

Upon his release from prison in 1993, Milken founded the Prostate Cancer Foundation, the world's largest philanthropic source of funds for prostate cancer research. Milken himself was diagnosed with advanced prostate cancer in the same month he was released from the prison. His cancer is currently in remission. Prostate cancer is a disease in which cancer develops in the prostate, a gland in the male reproductive system. ...

In 2003, Milken launched the Washington, D.C.-based think tank called FasterCures, which seeks greater efficiency in researching all serious diseases. This article is about the institution. ...

Fortune magazine called him "The Man Who Changed Medicine"[1] in a 2004 cover story about his positive influence on medical research.

Milken is also a major donor to the Milken Community High School, a private Jewish high school. Milken Community High School, colloquially called Milken, is a private Jewish High School in Bel-Air in Los Angeles, California. ...

Trivia

• Milken originally planned to fight the charges against him, hiring one of Ronald Reagan's former campaign aides to launch a public relations campaign prior to the trial.
• After his incarceration, Milken hired Alan Dershowitz to help reduce his sentence.
• Milken and the supposedly light sentence he received is referenced in the Deeelite song The Fuddy Duddy Judge: "You get four years if you are Michael Milken but 10-15 if you rob the milk man."
• Oliver Stone stated in the special features of DVD release of the movie Wall Street starring Michael Douglas that the movie is a close parallel to Michael Milkin's past career.

Ronald Wilson Reagan (February 6, 1911 – June 5, 2004) was the fortieth President of the United States (1981 – 1989) and the thirty-third Governor of California (1967 – 1975). ... Alan Morton Dershowitz (born September 1, 1938) is an American political figure and criminal law professor at Harvard Law School known for his extensive published works, career as an attorney in several high-profile law cases, and commentary on the Arab-Israeli conflict. ... Deee-Lite was a house- and dance music group formed in New York City. ... William Oliver Stone (born September 15, 1946), known simply as Oliver Stone, is a three-time Academy Award-winning American film director and screenwriter. ... For other people bearing this name, see Michael Douglas (disambiguation). ...

See also

• List of personalities associated with Wall Street

Over the years, certain persons associated with Wall Street have become famous, even legendary. ...

External links

• Mike Milken's official website
• The Boom Generation - Seventh Decade article in the WSJ by Michael Milken, 9/19/2006

References

1. ^ ^{a b c d} The World's Billionaires: #458 Michael Milken. Forbes.com (2007-03-08). Retrieved on 2007-05-01.

• Connie Bruck - The Predators' Ball : the inside story of Drexel Burnham and the rise of the junk bond raiders, New York: American Lawyer/Simon and Schuster, 1988, Penguin paperback (updated), 1989.

• James B. Stewart - Den of Thieves, New York: Simon & Schuster, 1991, (ISBN 0-671-63802-5). NOTE: Stewart won the Pulitzer Prize in 1988 for his coverage of the 1987 stock market crash, as well as his reporting on insider trading scandals.

• Ben Stein - A License to Steal: the Untold Story of Michael Milken and the Conspiracy to Bilk the Nation, Simon and Schuster, 1992

• Daniel R. Fischel - Payback: the conspiracy to destroy Michael Milken and his financial revolution, New York, New York: HarperBusiness, 1995, (ISBN 0-88730-757-4). Note: Fischel was Milken's attorney at one time; he is also an economist affiliated with the University of Chicago.

• Robert Sobel - Dangerous Dreamers: The Financial Innovators from Charles Merrill to Michael Milken' (1993), (ISBN 0-471-57734-0). Note: Sobel is a noted business historian.