Michael Milken
The 'Junk Bond King' who reshaped finance, faced conviction, and turned to philanthropy.
Michael Robert Milken (born July 4, 1946) is an American financier who became a central figure in the financial world of the 1980s, most notably for pioneering the market for high-yield bonds, commonly known as junk bonds. This role earned him the moniker "Junk Bond King." At the height of his career as head of the high-yield bond department at Drexel Burnham Lambert, his compensation over a four-year period in the late 1980s exceeded $1 billion, a record for U.S. income at the time. Milken was indicted in 1989 on charges of racketeering and securities fraud as part of an insider trading investigation. He ultimately pleaded guilty to securities and reporting violations, though not to racketeering or insider trading, as part of a plea bargain. He was sentenced to ten years in prison, fined $600 million (his personal website states $200 million), and permanently barred from the securities industry by the Securities and Exchange Commission. His sentence was later reduced to two years after he cooperated in testimony against former colleagues and for good behavior. In February 2020, President Donald Trump granted him a pardon. Beyond finance, Milken is a co-founder of the Milken Family Foundation, chairman of the Milken Institute, and founder of medical philanthropies focused on research into melanoma, cancer, and other life-threatening diseases. A prostate cancer survivor himself, he has dedicated substantial resources to research on that disease. His early life saw him grow up in a middle-class Jewish family in Encino, California, where he worked at a diner and was head cheerleader at Birmingham High School. He graduated with highest honors from the University of California, Berkeley, and earned an MBA from the Wharton School. At Berkeley, he was influenced by credit studies showing that a portfolio of non-investment grade bonds could offer better risk-adjusted returns than investment-grade bonds. After joining Drexel in 1969, he persuaded his superiors to let him start a high-yield bond trading department, which soon generated a 100 percent return on investment. By the mid-1980s, his network of bond buyers enabled him to raise large sums quickly, facilitating leveraged buyouts and the use of "highly confident letters" from Drexel, which, though legally non-binding, were considered reliable due to Milken's market-making reputation. Despite his immense influenc
- born
- July 4, 1946
- field
- Finance
- nationality
- American
- known_for
- Development of the high-yield bond market; conviction for securities law violations
Quick Facts
- Birth Name
- Michael Robert Milken
- Birth Date
- 1946-07-04
- Birth Place
- Encino, California, U.S.
- Education
- University of California, Berkeley (BS) / University of Pennsylvania (MBA)
- Occupation
- Businessman · financier
- Known For
- Developing the high-yield bond market
- Criminal Charges
- Securities and reporting violations (1989)
- Criminal Penalty
- Served 22 months in prison / $600 million fine
- Criminal Status
- Released / Pardoned (February 18, 2020)
- Spouse
- Lori Hackel · 1968
- Children
- 3
- Relatives
- Lowell Milken (brother)
Facts from the source article.
Lore & Background
Milken was born into a middle-class Jewish family in Encino, California. He graduated from Birmingham High School, then earned a BS with highest honors from UC Berkeley in 1968, and an MBA from Wharton. He joined Drexel in 1969, eventually heading its high-yield bond department. His compensation exceeded $1 billion over four years in the late 1980s. Indicted in 1989 for racketeering and securities fraud, he pleaded guilty to securities and reporting violations. He was sentenced to ten years in prison, fined $600 million (though his personal website claims $200 million), and permanently barred from the securities industry. His sentence was later reduced to two years for cooperating with testimony against former colleagues and for good behavior. He was pardoned by President Donald Trump in February 2020.
Reader's Guide
Milken co-founded the Milken Family Foundation, chairs the Milken Institute, and established medical philanthropies that fund research into melanoma, cancer, and other life-threatening diseases. Having survived prostate cancer himself, he has directed substantial resources toward studying that illness. His philanthropic work stems from his earlier career as a financier who developed the market for high-yield bonds, known as junk bonds, earning him the nickname “Junk Bond King.” While heading Drexel Burnham Lambert’s high-yield bond department in the late 1980s, his compensation exceeded one billion dollars over four years, a record for U.S. income at the time. He was indicted for racketeering and securities fraud in 1989, pleaded guilty to securities and reporting violations, and was sentenced to ten years in prison, fined six hundred million dollars (though his personal website states two hundred million), and permanently barred from the securities industry. His sentence was later reduced to two years after he cooperated in testimony against former colleagues and for good behavior. In February 2020, President Donald Trump pardoned him.
Did You Know?
- Milken was head cheerleader at Birmingham High School.
- His classmates included future Disney president Michael Ovitz and actresses Sally Field and Cindy Williams.
- He was influenced by credit studies by W. Braddock Hickman, a former president of the Federal Reserve Bank of Cleveland.
- Milken's high-yield bond operation moved to Century City in Los Angeles in 1978.
Notable Quotes (Wikiquote)
"Michael Milken is an American investor and financier, known for his association with the junk bond market in the 1980s as well as for his conviction on federal securities laws." — Michael Milken "People are the scarce resource. It's not buildings, it's not printing presses, and it's not factories that are the scarce resource." — Michael Milken
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