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Person

Michael Milken

Nationality:

American
Born:

1946
Occupation:

Billionaire Financier
Spouse:

Lori Milken

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Michael Milken is a billionaire financier and former securities trader. According to Forbes, Milken has a net worth of $6.5 billion as of July 2024 due to his investments in more than one asset management firm, hedge funds, venture capital, and private equity. 1 Milken has been called “The Man Who Changed Medicine” by Fortune, is listed amongst “Visionaries Reimagining Our Children’s Future” by Forbes, and was named one of the “75 Most Influential People of the 21st Century” by Esquire. 2 3

Milken was the target of a U.S. Securities and Exchange Commission (SEC) investigation in 1986 after Milken and his then employer, an investment bank called Drexel Burnham Lambert, were linked to illegal stock trading. 4 5 The SEC charged Drexel Burnham Lambert and Michael Milken in September 1988 for several violations including insider trading, inaccurate record-keeping, and manipulation of stock prices. There were also allegations of racketeering and fraud. 6

Milken pleaded guilty to charges of of securities and reporting violation in April 1990. He agreed to pay $600 million in penalties and was initially sentenced to ten years in prison, which was reduced to around two years, along with three years of probation, 5,400 hours of community service, and a lifetime ban from trading in securities. Drexel Burnham Lambert declared bankruptcy in 1990 and Milken was released from prison in 1992. 4 5

Milken was pardoned by then-President Donald Trump in February 2020. President Trump cited the “incredible job” Milken has done for cancer research via his Prostate Cancer Foundation. 7 8

Education and Career

Michael Milken was born in Encino, California, on July 4, 1946. Milken attended Birmingham High School where he was head cheerleader, prior to studying at the University of California, Berkeley, where he majored in business administration. Milken continued his education and received a Master’s degree in business administration from the Wharton School at the University of Pennsylvania. 4 5

In 1970, Milken was hired by the bond-trading department of Drexel Burnham Lambert, an American multinational investment bank, where he generated substantial profits by trading in “high-yield” bonds, also known as “junk bonds,” which are “bonds that are rated below investment grade” by credit agencies. High-yield bonds are riskier to invest in than other bonds but they pay higher returns. 4 5 9

Milken was given his own designated high-yield bond department at Drexel Burnham Lambert during the mid-1970s, and by 1976, he was earning 100 percent on the capital the company provided him. Drexel Burnham Lambert allowed Milken to move his high-yield bond department from its headquarters in New York to Beverly Hills, California. 4 5

Milken has donated $500 million to the Center For Advancing The American Dream in Washington D.C. 10

Criminal Investigation

Michael Milken and Drexel Burnham Lambert became the targets of a 1986 U.S. Securities and Exchange Commission (SEC) investigation after Milken and the investment bank were linked to illegal stock trading. 4 5

Ivan Boesky, who was an arbitrageur with substantial dealings with Milken, pleaded guilty to insider trading in 1986. The SEC investigated potential co-conspirators provided by Boesky, one of whom was Milken. 5

Boesky had paid Drexel Burnham Lambert $5.3 million, which the investment firm claimed was for a “consultation fee.” This raised suspicions and prompted the SEC to investigate further. 5

The SEC charged Drexel Burnham Lambert and Michael Milken in September 1988 for several violations including insider trading, inaccurate record-keeping, and the manipulation of stock prices. There were also allegations of racketeering and fraud. 5

Drexel Burnham Lambert pleaded guilty to six charges, agreed to pay $650 million, and also agreed to assist the SEC with its investigation into Milken, who pleaded guilty in April 1990 to charges of securities and reporting violation. “I realize that by my acts I have hurt those who are closest to me. I am truly sorry,” Milken stated. 4 5

Milken agreed to pay $600 million in penalties, was initially sentenced to ten years in prison (which was reduced to around two years), and was given three years of probation along with 5,400 hours of community service. Milken was also given a lifetime ban from trading in securities. Drexel Burnham Lambert declared bankruptcy in 1990 and Milken was released from prison in 1992. 4 5

Milken was pardoned by then-President Donald Trump in February 2020. President Trump cited the “incredible job” Milken has done for cancer research via his Prostate Cancer Foundation. 7 8

Affiliated Organizations

Michael Milken founded the Milken Institute in 1991. The Milken Institute is a center-left think tank that conducts policy research and organizes programs on issues including public health, environmentalism, economic policy, and globalization. The organization has endorsed mostly left-of-center policies, including the implementation of new consumption taxes, increased government spending on health care and other entitlement programs, and increased environmental regulations. It has also, however, endorsed some right-of-center policies, including expanded school choice programs and decreased corporate tax rates. 11 12 13 14 15

The organization came under fire in October 2019 for lobbying in favor of a tax incentive program that would directly benefit Milken. 16

The Milken Institute hosts more than 250 events each year, including conferences around the world.

The Milken Institute Center for Strategic Philanthropy is a left-of-center philanthropic consulting firm that advises foundations and individual major donors on giving strategy, specializing in issues of medical research, environmentalism, public health, and education. It is part of the Milken Institute. 17 18

Milken also founded the Prostate Cancer Foundation in 1993. The foundation provides funding for research regarding the treatment of prostate cancer and the development of strategies to improve the quality of life for those with the disease. 8 19

Milken hosted the first Cancer Summit in 1995, which led to a 1998 March on Washington to call for increased funding of biomedical research. U.S. Congress doubled the funding of the National Institutes of Health over the course of five years after the March on Washington. 3

Milken also helped physicians launch the Melanoma Research Alliance in 2007. The organization aims to increase research progress against skin cancers. 20

Michael Milken and his brother Lowell Milken founded the Milken Family Foundation in 1982. The foundation’s initiatives focus on education and medical research. 21 22

References

  1. “Michael Milken.” June 28, 2024. Accessed July 1, 2024. https://www.forbes.com/profile/michael-milken/.
  2. “Mike Milken.” Milken Institute. Accessed July 1, 2024. https://milkeninstitute.org/staff/mike-milken.
  3. “Michael Milken.” Milken Family Foundation. Accessed July 1, 2024. https://www.mff.org/about-the-foundation/the-founders/michael-milken/.
  4. “THE MILKEN SENTENCE; Milken: Pathfinder for the ‘Junk Bond’ Era.” New York Times – Archived. November 22, 1990. Accessed July 1, 2024. https://web.archive.org/web/20170204192438/http:/www.nytimes.com/1990/11/22/business/the-milken-sentence-milken-pathfinder-for-the-junk-bond-era.html.
  5. Gentleman, “The. “The story of Michael Milken: the Junk Bond King.” The Gentleman’s Journal. October 11, 2016. Accessed July 1, 2024. https://www.thegentlemansjournal.com/article/story-michael-milken-junk-bond-king/
  6. [1] Gentleman, “The. “The story of Michael Milken: the Junk Bond King.” The Gentleman’s Journal. October 11, 2016. Accessed July 1, 2024. https://www.thegentlemansjournal.com/article/story-michael-milken-junk-bond-king/.
  7. Mangan, Dan. “Trump pardons Michael Milken, face of 1980s insider trading scandals.” February 18, 2020. Accessed July 1, 2024. https://www.cnbc.com/2020/02/18/trump-pardons-michael-milken-face-of-1980s-financial-scandals.html.
  8. “Michael Milken.” Prostate Cancer Foundation. March 1, 2016. Accessed July 1, 2024. https://www.pcf.org/bio/mike-milken/.
  9. Team, CFI. “Junk Bonds.” What You Need to Know about Junk Bond Ratings. Accessed July 1, 2024. https://corporatefinanceinstitute.com/resources/fixed-income/junk-bonds/.
  10. “Michael Milken.” Forbes. Accessed July 1, 2024. https://www.forbes.com/profile/michael-milken/.
  11. “The Tax Reform that Just Won’t Die [And Shouldn’t].” Milken Institute Review. Accessed July 1, 2024. https://www.milkenreview.org/articles/the-tax-reform-that-just-wont-die-and-shouldnt.
  12. Blomqvist, Åke. “Canada’s Health Care.” Milken Institute Review. Accessed July 1, 2024. https://www.milkenreview.org/articles/canadas-health-care.
  13. Chin, Curtis S. “Three lessons for Asia from the world’s top megacities.” November 27, 2020. Accessed July 1, 2024. https://asia.nikkei.com/Opinion/Three-lessons-for-Asia-from-the-world-s-top-megacities.
  14. Danilova, Maria. “DeVos pushes for ‘most ambitious expansion’ of school choice, but offers few details.” PBS News. May 23, 2017. Accessed July 1, 2024. https://www.pbs.org/newshour/education/devos-pushes-ambitious-expansion-school-choice-offers-details.
  15. “Just Do It: Cut Corporate Taxes and Create Middle-Class Jobs.” Milken Institute. Accessed July 1, 2024. https://milkeninstitute.org/article/just-do-it-cut-corporate-taxes-and-create-middle-class-jobs.
  16. “Symbol of ’80s Greed Stands to Profit From Trump Tax Break for Poor Areas.” New York Times. Accessed July 1, 2024. https://www.nytimes.com/2019/10/26/business/michael-milken-trump-opportunity-zones.html.
  17. “MI Philanthropy.” LinkedIn. Accessed July 1, 2024. https://www.linkedin.com/showcase/mi-philanthropy/.
  18. “Milken Institute establishes inaugural advisory board for its Center for Strategic Philanthropy.” August 19, 2020. Accessed July 1, 2024. https://milkeninstitute.org/article/milken-institute-establishes-inaugural-advisory-board-its-center-strategic-philanthropy.
  19. “Mission.” Prostate Cancer Foundation. Accessed July 1, 2024. https://www.pcf.org/about-us/about-our-work/mission/.
  20. “Michael Milken.” Melanoma Research Alliance. Accessed July 1, 2024. https://www.curemelanoma.org/mra-overview/board-of-directors/michael-milken.
  21. “Michael Milken – Philanthropist, Financier, Medical Research Innovator & Public Health Advocate.” Mike Milken. Accessed July 1, 2024. https://www.mikemilken.com/.
  22. “Initiatives.” Milken Family Foundation. Accessed July 1, 2024. https://www.mff.org/initiatives/.
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