Milken’s group underwrote issues of low-rated, high-yielding bonds—the so-called junk bonds—some of which were convertible or came with warrants to purchase stock. The higher yield was the extra compensation investors required to offset the perceived risk that the bonds would default. Filling a gaping need and hungry demand in the business community, Milken’s group became the greatest financing engine in Wall Street history. Such innovation outraged the old line establishment of corporate America,
This is an interesting perspective: that Milken was an innovator and threatened the Wall Street establishment who enlisted the government (and an ambitious Giuliani) to take him down. That every form on Wall Street breaks the rules here and there so they were confident they could find something, but the big players were far less scrupulous and acting far more illegally on a regular basis. “Milken was framed!” he claims. I’m not so sure, will need to read more. Milken have a memoir I presume?
