"Junk-Bond" Expert Sentenced - November 1990

In New York District Court on November 21, Judge Kimba Wood sentenced Michael Milken, a former employee of Drexel Burnham Lambert Inc., to 10 years in prison for securities fraud. Milken had helped facilitate the corporate takeover boom of the 1980s through the promotion of high-risk, high-yield securities known as "junk bonds." He pleaded guilty in April 1990 to fraud---6 felony counts---and agreed to pay fines and make restitution totalling $600M. In imposing a sentence that was longer than some had predicted, Judge Wood dismissed assertions by Milken's lawyers that the crimes were little more than technicalities. She said a prison term was necessary to deter others in the financial industry from engaging in similar practices.