Michael Milken receives a presidential pardon

ON FEBRUARY 13TH 1990 Drexel Burnham Lambert, which only a few years earlier had been America’s most profitable investment bank, filed for bankruptcy. Its death knell had sounded ten months earlier when Michael Milken, who created the junk-bond market on which the bank’s success was founded, was indicted for fraud. He would plead guilty to six counts and serve 22 months in prison.

Thirty years on, Mr Milken has been pardoned by President Donald Trump. Among his petitioners was Rudolph Giuliani, the president’s personal attorney, who had led the investigation into Drexel three decades ago. The pardon was much sought after. Many of the people who worked at Drexel have long felt that the prosecution of Mr Milken was, in essence, a vendetta. Drexel was an upstart firm. It unsettled corporate America by supplying junk-bond finance to a new breed of corporate raiders. It used its dominance of high-yield-bond trading, which Mr Milken had built up in the 1970s and early 1980s, to push into mergers and acquisitions and underwriting. That put noses on Wall Street out of joint. “We were not very humble about our success,” says a former colleague. So when the Feds came for him, Mr Milken had few friends in high places and a lot of enemies. He made a handy scapegoat for the savings-and-loan crisis.

If that was the reality then,...

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