“The greatest criminal conspiracy the financial world has ever known”
Born on Independence Day 1946 in Encino, California, Michael Robert Milken was unknown to the general public until 29 March 1989 when he faced 98 charges of racketeering, insider trading and securities fraud and, after plea bargaining, pleaded guilty to six although he was not guilty of insider trading. One critic described Milken’s actions as “the greatest criminal conspiracy the financial world has ever known”.
Milken began his career with Drexel Harriman Ripley in 1969. When the company merged with another, Milken persuaded his boss to allow him begin a high-yield bond-trading department. The gamble paid off and he moved into offices at 9560 Wilshire Boulevard in Beverly Hills where he worked long hours at an X-shaped desk. Milken attracted a number of high-profile clients to his company. He once said, “There is no shortage of capital; there is only a shortage of management talent.”
In 1979 the Securities and Exchange Commission began to take an interest in Milken, whom they believed was behaving with a degree of illegality in his trades. Nothing happened until 1986 when arbitrageur Ivan Boesky (search the article) pleaded guilty to securities fraud as part of a larger investigation into insider trading. United States Attorney for the Southern District of New York Rudolph Giuliani launched a criminal probe into Milken’s activities and for two years Drexel insisted that there had been no illegal activities carried out. On 20 December 1989 Drexel’s lawyers found suspicious activity in a section set up by Milken and the next day pleaded no contest to six counts of stock parking and stock manipulation.
Beverly Hills, California, USA
Milken was jailed for ten years after pleading guilty to six securities and reporting violations on 24 April 1990 but served only 22 months (from March 1991 until January 1993) before he was freed. Not long after he declared that he had been diagnosed with terminal prostate cancer and given a year to 18 months to live. He was also fined $200 million and banned from working in the financial industry for life. In 1996 he launched computer technology and retraining company, Knowledge Universe.
YOU SHOULD KNOW:
The judge, Kimba Wood, who told Milken, “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” was appointed to be Attorney General by Bill Clinton. However, she had to withdraw because she had given a job as nanny to an illegal alien.