michael milken is a billionaire financier best known as the man behind the junk bond boom of the late 1970s and 1980s milken found a way to lend money to riskier companies struggling to access credit leading parts of the economy to boom and milken to make a fortune 1
greed eventually got the better of milken and he was sent to prison for securities fraud since getting released the junk bond king has remained in the spotlight this time mainly for his charitable donations and focus on education and medical research early life and educationmichael milken was born on july 4 1946 in encino california michael whose father was an accountant was said to be reclusive from an early age and reportedly stood out by working harder and longer than his peers he was head cheerleader of birmingham high school and went bald in his early teens 12in 1968 michael earned a bachelor s degree from the university of california berkeley he then pursued an mba at the university of pennsylvania 1in 1969 while studying at the university of pennsylvania s wharton school of finance milken joined drexel burnham lambert two years later he became head of the company s bond trading department milken would remain with drexel burnham lambert for 17 years during which he took a keen interest in junk bonds 1notable deedsat drexel burnham lambert milken initiated a high yield bond trading department an idea that would eventually earn a 100 return on investment 3 envisioning a path for investors to garner high returns by buying bonds issued by companies with low credit ratings milken helped drexel burnham lambert launch an effort to underwrite junk bonds by convincing companies to issue them 4the bonds provided capital for companies unable to access credit and milken raised a large amount of money from a sizable base of interested investors milken led drexel burnham lambert s lucrative practices of leveraged buy outs hostile takeovers and junk bond issues 4the percentage of the junk bond market controlled by drexel burnham lambert in the 1980s 5milken s compensation topped 550 million in 1987 and exceeded 1 billion over four years 6 milken was nicknamed the junk bond king and at its peak drexel burnham lambert was one of the largest investment banks in the u s 5wall street leaders pondered how drexel burnham lambert could allow one executive to gain unregulated power such an extraordinary income inevitably raises questions as to whether there isn t something unbalanced in the way our financial system is working said david rockefeller retired chairman of the chase manhattan bank one has to be concerned when the norms that have been accepted over the years suddenly become so distorted 6in 1986 one of drexel burnham lambert s clients ivan boesky was convicted of insider trading and implicated milken and drexel burnham lambert in his illegal financial dealings two years later in 1988 milken and his employer were charged with securities fraud 1in 1990 milken pleaded guilty to six felony counts of violating securities laws and was sentenced to ten years in prison and fined 600 million he was also banned for life from the securities industry by the securities and exchange commission sec in that same year drexel burnham lambert declared bankruptcy 7milken s sentence was later reduced to two years for good behavior and for cooperating with testimony against former colleagues gordon gekko the conniving trader from oliver stone s 1987 film wall street was said to be partly inspired by michael milken 7following his release from prison milken worked as a strategic consultant which violated his probation and he was subsequently fined 8 he was pardoned by president donald trump in february 2020 7milken s estimated net worth as of december 12 2023 9