Michael Milken

Michael Milken is an American financier and philanthropist, best known for his pivotal role in developing the high-yield bond market during the 1970s and 1980s. His work at Drexel Burnham Lambert revolutionized corporate finance, providing capital to growing companies but also led to his conviction for securities violations. Following his imprisonment, Milken has become a major philanthropist, founding organizations like the Milken Institute and focusing significant resources on medical research and education.

Early life and education

Born in Encino, California, Milken demonstrated an early aptitude for mathematics and finance. He attended Birmingham High School in the San Fernando Valley before enrolling at the University of California, Berkeley, where he earned a Bachelor of Science degree. He subsequently pursued a Master of Business Administration from the Wharton School of the University of Pennsylvania, graduating first in his class. During his time at Wharton, he began his influential research into the performance of below-investment-grade bonds, laying the groundwork for his future career.

Career at Drexel Burnham Lambert

Joining the investment bank Drexel Burnham Lambert in 1969, Milken quickly rose to prominence by championing the use of high-yield bonds, often pejoratively called "junk bonds." Operating from Beverly Hills, California, his High-yield debt department became extraordinarily profitable, financing the growth of companies like MCI Communications, CNN, and Ted Turner's media empire. His financial innovations fueled the leveraged buyout boom of the 1980s, enabling corporate raiders such as Carl Icahn and T. Boone Pickens to execute major takeovers. The annual Predators' Ball hosted by Drexel became a symbol of the era's aggressive financial culture, attracting major figures from Wall Street and corporate America.

Legal issues and conviction

Milken's activities eventually drew intense scrutiny from federal authorities, including the U.S. Securities and Exchange Commission and the United States Department of Justice. In 1989, he was indicted on 98 counts of racketeering and securities fraud following an investigation led by United States Attorney Rudolph Giuliani. The charges stemmed from activities like insider trading, stock parking, and tax evasion related to deals with Ivan Boesky. In 1990, Milken pleaded guilty to six lesser counts of securities and reporting violations. He agreed to pay $600 million in fines and restitution and was sentenced to ten years in prison, though his sentence was later reduced to two years for cooperating with the government and his extensive charitable works. He was permanently barred from the securities industry.

Philanthropy and later career

After his release from Federal Prison Camp, Dublin, Milken turned his focus to philanthropy. He founded the Milken Family Foundation and the Milken Institute, a non-partisan economic think tank. He has donated billions to medical research, particularly in the fields of prostate cancer and melanoma, through initiatives like the Prostate Cancer Foundation. His philanthropic efforts also heavily support education reform, including the Milken Educator Awards. In finance, he has worked as a strategic consultant and chaired various companies, remaining an influential voice on capital markets and economic growth through his writings and the annual Milken Institute Global Conference.

Legacy and impact

Milken's legacy is profoundly dual-natured. In finance, he is credited with democratizing access to capital, fundamentally altering the landscape of corporate finance and mergers and acquisitions in America. Critics, however, associate him with the excesses and perceived greed of the 1980s, as depicted in works like the film Wall Street. His post-conviction life has significantly reshaped his public image, with his philanthropic endeavors in medical research and public health garnering widespread recognition, including awards from groups like the American Association for Cancer Research. The ongoing work of the Milken Institute continues to influence global discussions on financial markets, health economics, and public policy.

Category:American financiers Category:American philanthropists Category:1946 births Category:Living people