Word: drexel
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Dates: during 1980-1989
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...battle to control RJR Nabisco has pitted some of Wall Street's most powerful investment houses against one another, but the financial muscle behind the bidding is really the legacy of one man: Michael Milken. It is not just that Milken's firm, Drexel Burnham Lambert, is bankrolling the Kohlberg Kravis Roberts bid to the tune of $5 billion. Milken's role is much grander and far more controversial. The boyish moneyman with the tousled toupee and the obsessive work habits has almost single-handedly sparked the frenzy of takeovers and buyouts that has given the Roaring Eighties their name...
...Nabisco showdown may prove to be one of Milken's final moments of glory. He and Drexel are expected to be slapped any day now with criminal indictments accusing them of racketeering, mail fraud and other crimes. The charges would stem from two years of federal investigations that prompted the Securities and Exchange Commission to file a civil suit against Milken and Drexel in September, accusing them of 18 transactions including stock manipulation and other securities-law violations. Says a close associate of the embattled dealmaker: "Two years ago, Milken was on top of the world. Now it has crashed...
...expected criminal charges could heavily damage Drexel, the fifth largest U.S. investment firm and the fastest-growing powerhouse on Wall Street. Rudolph Giuliani, the U.S. Attorney for the Southern District of New York, is likely to follow the SEC in accusing Drexel and Milken of collaborating with convicted arbitrager Ivan Boesky to defraud the firm's clients, trade on insider information and conceal the true ownership of stocks -- all, presumably, in the pursuit of greater profits and power. Milken's lawyers, for their part, accuse the Government of a vindictive campaign based solely on self-serving testimony by Boesky...
...megalomaniac who has built a tottering tower of corporate debt? Or is he a financial genius whose funding of unsung, mid-size industries greatly overshadows his role as a takeover player? He has many defenders among buyers and users of his junk bonds. Says MCI chairman William McGowan, whom Drexel helped raise $2.4 billion for building long-distance telephone lines: "When we first went to Milken, we were not even qualified for junk bonds, but he was able to help us. People went to him because the rest of the financial establishment was turning away companies like ours...
...investment firm Drexel Burnham Lambert has been pictured in an SEC indictment as Ivan Boesky's partner in securities fraud. But the company may have been one of the convicted arbitrager's victims as well. The London Stock Exchange is looking into accusations that Boesky used his network of partnerships to hide from Drexel the size, and thus the potential risk, of stock purchases he made with money he borrowed from the firm. Far from feeling duped, Drexel officials welcomed the probe. Since Boesky is the prime witness against the firm, his alleged backstabbing may erode his credibility. Drexel officials...