Junk bond king of the 1980's. Graduated from the business school at Berkeley in 1968, and went to work for Drexel Firestone, a banking firm. In 1971, Drexel merged with Burnham and Company to form Drexel Burnham Lambert, and Milken became head of the bond trading department. By the mid-1980's, Drexel Burnham Lambert had floated so many junk bonds that they had become one of the biggest financiers in the United States -- and had a considerable international presence. Milken's junk bond monies became a prime source of funding for the notorious corporate raiders, fueling hundreds of acquisitions, hostile takeovers and leveraged buyouts.

In 1986, Milken's client Ivan Boesky was convicted of insider trading. He ratted out Milken and several other Drexel Burnham Lambert officers. All were charged with securities fraud, with damages in the hundreds of millions of US dollars. Milken resigned in 1989, and once the head man was gone, the junk bond market collapsed. Drexel Burnham Lambert filed for bankruptcy in 1990, and Milken got 10 years in jail and $600 million in fines for securities fraud.

Just to put that $600M fine in perspective: According to the US Government, Drexel paid Michael Milken $296M in 1986 and $550M in 1987. He avoided a heavier jail term by pleading guilty to the aforementioned securities fraud charges in exchange for the government dropping the more serious charges of insider trading and racketeering, (a very good deal for him, I would say). In addition, he was banned for life from working in the securities industry.

Whilst it is true that he also received a 10 year jail sentence in 1990, note that this was reduced to two years plus three years probation in 1991.

Upon his release from jail, Michael Milken began working as a management consultant but came into conflict with the SEC, who deemed that he was in violation of parole.

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