Word: milken
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Dates: during 1980-1989
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...Michael Milken, the most powerful financier of the 1980s, was limping when he entered a mid-Manhattan office last Wednesday to meet with TIME Senior Correspondent Frederick Ungeheuer for a rare interview. The 42-year-old junk- bond wizard was recovering, he explained, from knee surgery to remove cartilage he had torn in a backyard basketball game at his suburban Los Angeles home. Looking tanned and relaxed, Milken did not know that he was minutes away from being slammed with one of the most sweeping stock-fraud lawsuits in Wall Street history...
...subject Milken studiously avoided was the intensive 22-month federal probe of the junk-bond department he heads at the Drexel Burnham Lambert investment firm, but the matter soon forced itself on him. Suddenly his lawyer . was summoned from the room. Within minutes he returned and led Milken away. Down the hall the attorney informed Milken that a long-feared moment had arrived: the Securities and Exchange Commission was filing a weighty civil complaint against him, his employer and several colleagues...
...case could be a turning point in the fortunes of Wall Street's most go- getter firm, the financing machine that drove much of the corporate raiding of the roaring 1980s. The complaint charged Milken and Drexel with a whole catalog of offenses, including fraud against the firm's own clients, insider trading, the "parking" of stocks to conceal their true ownership, and the destruction of accounting records to cover up the transgressions...
...Beverly Hills-based Milken, who built the junk-bond industry almost from scratch and amassed a personal fortune estimated at more than $500 million, is attracting plenty of attention these days -- much of it in the form of official probes. For 18 months, a federal grand jury in Manhattan has been investigating Milken and other executives of the Drexel Burnham Lambert investment firm, reportedly on charges that they helped Ivan Boesky carry out his insider-trading schemes. Milken and his employer have denied any such wrongdoing...
...House subcommittee is pursuing a separate suspicion -- that Milken and other Drexel Burnham employees may have taken huge profits at the expense of the firm's customers. Congressional documents show that on several occasions partnerships involving Drexel Burnham employees bought up large stakes in the firm's new junk-bond issues, then sold them at a profit. At the same time, some of the firm's clients reportedly found that their access to the issues was sharply limited...