Michael Milken is not giving up on having his securities fraud convictions overturned, and now it looks as though he may have the help to make it happen. In what has been a decades long endeavor for Milken, he is finally gaining traction to cosmetically repair his record by having his convictions from the 1980's overturned, Bloomberg reported today.
Milken is perhaps best known for being the “junk-bond king" of the 1980s, and his firm, Drexel Burnham Lambert, pioneered the use of junk bonds for leveraged buyouts and single-handedly helped fuel a merger and acquisition boom. As Bloomberg wrote:
From his X-shaped desk in Beverly Hills, California, Milken had helped popularize high-yield debt in the 1980s at Drexel Burnham Lambert, fueling the leveraged buyout boom. He was implicated in illegal transactions by Ivan Boesky, a stock arbitrager and longtime Milken client.
Subsequent to that, Milken was also convicted of securities fraud associated with dealings with a Drexel client, and he had to serve two years in prison and pay a $600 million fine.
After paying his debt to society, he founded the Milken Institute and has since funded hundreds of millions of dollars, if not billions, for cancer research. He also hosts one of the most popular financial conferences that takes place on the west coast annually every year – drawing some of the biggest names in the industry and in the media.
Milken has been trying for decades to have his securities fraud convictions overturned. It is a move that is purely for cosmetics and won’t make any tangible difference on the billionaire's day-to-day life, other than him being able to claim a victory for clearing his name and possibly give Wall Street regulators and federal prosecutors yet another reason to groan.
And now it looks as though Milken finally has the traction to possibly make it happen with the Trump administration. His list of supporters, including Anthony Scaramucci and Steve Mnuchin, also includes the man who went after him in the 80s as Attorney General, Rudy Giuliani:
Some of President Donald Trump’s closest confidants have urged him to pardon Michael Milken, the 1980s “junk bond king” who has unsuccessfully sought for decades to reverse his securities fraud conviction, according to people familiar with the matter.
The idea of a Milken pardon is being supported by Anthony Scaramucci, the financier who briefly directed White House communications; Treasury Secretary Steven Mnuchin; and Trump son-in-law and senior adviser Jared Kushner, the people said. Another advocate is Rudy Giuliani, the onetime federal prosecutor whose criminal investigation landed Milken in jail but who later bonded with him.
Milken’s attempts to secure a presidential pardon have spanned Republican and Democratic administrations, with him or his supporters putting his name forward as a worthy clemency candidate in no small part due to his philanthropic works. Milken, who is worth $3.4 billion according to data compiled by Bloomberg, has mounted high-profile efforts since his conviction to combat prostate cancer and improve childhood education. However, until now presidents have declined requests to embrace a man who came to be viewed as a symbol of greed on Wall Street.
Bloomberg noted in its article that a pardon wouldn’t reverse Milken’s "lifetime ban on securities dealing, which would require a separate appeal to the Securities and Exchange Commission." The SEC could, from there, still resist granting his appeal, regardless of the presidential pardon. Bloomberg also wrote that it would potentially be overturning the most high profile insider trading case ever, if it happens:
Ripping up Milken’s conviction -- the result of arguably the highest-profile inside trading case ever -- would be a blow to federal prosecutors, particularly those overseeing Wall Street. It would also be a rebuke to the judge who oversaw the matter three decades ago and excoriated Milken at his sentencing.
Whether or not the pardon happens remains to be seen, but surely Milken's philanthropy over the last couple of decades and his high standing with presidential administration officials may see to it that his name is exonerated sometime soon after all.