Milken, Michael (1946–)

DURING THE 1970s, Michael Milken developed a financial scheme that made him one of the richest and most powerful men in the United States. He found that he could make enormous profits from rescuing “fallen angels” by engineering financial deals that offered high yields on low-priced debt notes. These so-called junk bonds were financed by Milken and his company, Drexel Burnham Lambert, for small, high-risk companies that had faced financial troubles or even bankruptcy but who still showed potential for recovery. Because of the risks involved, these companies had been generally ignored by investment bankers.

Milken was a master at convincing perspective investors that junk bonds were more lucrative than the more stable low-risk bonds. By the late 1980s, Milken who had become known as the ...