Milken, Michael Robert (1946–)

Michael Milken was an executive and a star trader at the now-defunct investment bank, Drexel Burnham Lambert. He received the nickname “junk bond king” for the role he played in making Drexel the leader in the junk bond market. Junk bonds are speculative investments that carry a higher than usual rate of interest (i.e., high yield) because they are associated with a greater risk of default. Junk bond financing fueled the takeover market of the 1980s by making it possible for smaller firms to mount a hostile takeover of much larger firms. Junk bonds and the role that Milken played in popularizing them have defenders and detractors, both of which are passionate. Critics blame junk bonds for the collapse of the savings and loan industry ...