# Who Is Michael Milken?

Michael Milken is a philanthropist and Chair of the Milken Institute

![Michael Milken](https://www.investopedia.com/thmb/9krOMdSVakZE8NUa-YCs2vzS6mI=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/michaelmilken.asp_V4-3f2ce8240b4541c0ac69676a2de0e557.png)

*— Investopedia / Ellen Lindner*

Michael Milken is a billionaire financier best known as the man behind the junk bond boom of the late 1970s and 1980s. Milken found a way to lend money to riskier companies struggling to access credit, which led to a boom and a fortune for Milken.

Greed eventually got the better of Milken, and he was imprisoned for securities fraud. Since his release, the "junk bond king" has remained in the spotlight, this time mainly for his charitable donations and focus on education and medical research.

### Key Takeaways

*   Michael Milken is a philanthropist and chair of the Milken Institute.
*   He joined Drexel Burnham Lambert in 1969 and traded in high-yield bonds, which earned him the nickname "junk bond king."
*   Milken served nearly two years in prison for [securities fraud](https://www.investopedia.com/terms/s/securities-fraud.asp#:~:text=Securities%20fraud%2C%20also%20referred%20to,individual%2C%20such%20as%20a%20stockbroker.) but was granted a full pardon by President Trump in 2020.
*   Since his release from prison, Milken has returned to the spotlight as a philanthropist and chair of the Milken Institute.

## Early Life and Education

Michael Milken was born on July 4, 1946, in Encino, California. Michael, whose father was an accountant, was said to be reclusive from an early age and reportedly stood out by working harder and longer than his peers. He was the head cheerleader of Birmingham High School.

In 1968, Michael earned a bachelor's degree from the University of California, Berkeley. He then pursued an [MBA](https://www.investopedia.com/terms/m/mba.asp) at the University of Pennsylvania.

In 1969, while studying at the University of Pennsylvania's Wharton School of Finance, Milken joined Drexel Burnham Lambert. Two years later, he became head of the company's bond trading department. Milken remained with Drexel Burnham Lambert for 17 years, during which time he became keenly interested in junk bonds.

## Notable Deeds

### The Junk Bond King

At Drexel Burnham Lambert, Milken initiated a high-yield bond trading department, an idea that would eventually earn a 100% return on investment. Envisioning a path for investors to garner high returns by purchasing bonds issued by companies with low credit ratings, Milken helped Drexel Burnham Lambert launch an effort to underwrite junk bonds by convincing companies to issue them.

The bonds provided capital for companies unable to access credit, and Milken raised a large amount of money from a sizable base of interested investors. Milken led Drexel Burnham Lambert's lucrative practices of [leveraged buy-outs](https://www.investopedia.com/terms/l/leveragedbuyout.asp), hostile takeovers, and "junk" bond issues.

### 70%

The percentage of the junk bond market controlled by Drexel Burnham Lambert in the 1980s.

Milken's compensation topped $550 million in 1987 and exceeded $1 billion over four years. He was nicknamed the "junk bond king," and at its peak, Drexel Burnham Lambert was one of the largest investment banks in the U.S.

Wall Street leaders pondered how Drexel Burnham Lambert could allow one executive to gain unregulated power. ''Such an extraordinary income inevitably raises questions as to whether there isn't something unbalanced in the way our financial system is working,'' said David Rockefeller, retired chairman of the Chase Manhattan Bank. ''One has to be concerned when the norms that have been accepted over the years suddenly become so distorted.''  

### Crimes

In 1986, one of Drexel Burnham Lambert's clients, [Ivan Boesky](https://www.investopedia.com/terms/i/ivan-boesky.asp), was convicted of [insider trading](https://www.investopedia.com/terms/i/insidertrading.asp) and implicated Milken and Drexel Burnham Lambert in his illegal financial dealings. Two years later, in 1988, Milken and his employer were charged with securities fraud.

In 1990, Milken pleaded guilty to six felony counts of violating securities laws and was sentenced to ten years in prison and fined $600 million. He was also banned for life from the securities industry by the Securities and Exchange Commission (SEC). In that same year, Drexel Burnham Lambert declared bankruptcy.

Milken's sentence was later reduced to two years for good behavior and cooperating with testimony against former colleagues.  

> **Fast Fact**
>
> Gordon Gekko, the conniving trader in Oliver Stone's 1987 film Wall Street, was said to have been partly inspired by Michael Milken.

Following his release from prison, Milken worked as a strategic consultant, which violated his probation, and he was subsequently fined. He was pardoned by President Donald Trump in February 2020.

### $7 billion

Milken's estimated net worth, as of Jan. 29, 2025.

## How Did Micheal Milken Make His Money?

Milken made his money as an investment banker and trading securities.

## What Does Micheal Milken Eat?

Milken attempts to eat as cleanly as possible. After being diagnosed with prostate cancer, Michael Milken wrote a series of books, including "The Taste for Living Cookbook: Mike Milken's Favorite Recipes for Fighting Cancer" with Beth Ginsberg.

## What Is Micheal Milken Doing Today?

Milken chairs the Milken Foundation, which prioritizes education and medical advancement. The foundation awards prizes to hardworking K-12 teachers and principals and offers financial support to college-bound students who need assistance.  

## The Bottom Line

Michael Milken is a billionaire and philanthropist mainly known for pioneering the junk bond craze of the 1980s. Nicknamed the "junk bond king," Milken, while working as an executive at the investment bank Drexel Burnham Lambert, became famous for getting companies with lower credit ratings access to capital.

Milken's work turned him into one of Wall Street's highest earners and a symbol of the greed and growth of financial markets in the 1980s. By 1990, he was behind bars for securities fraud but was released two years later for good behavior. He has since become a philanthropist and received a presidential pardon in 2020.

> **Article Sources**
>
> 1.  Britannica. "[Michael Milken](https://www.britannica.com/biography/Michael-R-Milken)."
>     
> 2.  The Gentleman's Journal. "[The Story of Michael Milken: the Junk Bond King](https://www.thegentlemansjournal.com/article/story-michael-milken-junk-bond-king/)."
>     
> 3.  Kornbluth. "[Highly Confident: The Crime and Punishment of Michael Milken](https://archive.org/details/highlyconfidentc00korn)."
>     
> 4.  Brewster Stearns, Linda, and Kenneth Allan. "[Economic Behavior in Institutional Environments: The Corporate Merger Wave of the 1980s](https://core.ac.uk/download/pdf/149235852.pdf)." _American Sociological Review_, vol. 61, no. 4. pp. 699-718.
>     
> 5.  Encyclopedia.com. "[Drexel Burnham Lambert Incorporated](https://www.encyclopedia.com/books/politics-and-business-magazines/drexel-burnham-lambert-incorporated)."
>     
> 6.  The New York Times. "[Wages Even Wall St. Can't Stomach](https://www.nytimes.com/1989/04/03/business/wages-even-wall-st-can-t-stomach.html)."
>     
> 7.  Washington Post. "[Who Is Michael Milken The "Junk Bond King" Trump Just Pardoned?](https://www.washingtonpost.com/business/2020/02/18/michael-milken-pardon/)"
>     
> 8.  Encyclopedia.com. "[Milken, Michael R](https://www.encyclopedia.com/religion/encyclopedias-almanacs-transcripts-and-maps/milken-michael-r)."
>     
> 9.  Forbes. "[Michael Milken](https://www.forbes.com/profile/michael-milken/?sh=47ac1a0b390e)."
>     
> 10.  Mikemilken.com. "[Biography](https://www.mikemilken.com/biography.taf)."