Milken’s Junk Bond Innovation “Opened Up Cheaper and More Efficient Financing”

(p. A15) In “Witness to a Prosecution,” Mr. Sandler, a childhood friend who was Mr. Milken’s personal lawyer at the time, walks the reader through Mr. Milken’s 30-plus year legal odyssey, beginning in 1986 with the federal government’s investigation, followed by his indictment, plea bargain, and prison term, right through to his pardon by President Donald Trump in 2020. The author tells a convincing and concerning story of how the government targeted a largely innocent man and, when presented with proof of that innocence, refused to turn away from a bad case.

. . .

After reading Mr. Sandler’s account, I no longer believe in Mr. Milken’s guilt, and neither should you. The author argues that most of what we know about Mr. Milken’s misdeeds is grossly exaggerated, if not downright wrong. What the government was able to prove in the court of law, as opposed to the court of public opinion, were mere regulatory infractions: “aiding and abetting” a client’s failure to file an accurate stock-ownership form with the SEC, a violation of broker-dealer reporting requirements, assisting with the filing of a false tax return. There was no insider-trading charge involving Mr. Boesky or anyone else, because the feds couldn’t prove one.

. . .

When you digest the reality of the case against Mr. Milken, you find that much of it was nonsense. As Mr. Sandler puts it: “The nature of prosecution and the technicality and uniqueness of the regulatory violations . . . certainly never would have been pursued had Michael not been so successful in disrupting the traditional way business was done on Wall Street.”

. . .

The junk-bond market he helped create has opened up cheaper and more efficient financing to many more companies than it ever destroyed. What started as a $10 billion market is now standing at around $1.4 trillion.

For the full review, see:

Charles Gasparino. “The Milken Story Revisited.” The Wall Street Journal (Monday, Dec. 18, 2023): A15.

(Note: ellipses between paragraphs added, ellipsis internal to penultimate quoted paragraph in original.)

(Note: the online version of the review has the date December 17, 2023, and has the title “BOOKSHELF; ‘Witness to a Prosecution’ Review: The Milken Story Revisited.”)

The book under review is:

Sandler, Richard V. Witness to a Prosecution: The Myth of Michael Milken. ForbesBooks: Charleston, South Carolina, 2023.

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