The ten-year sentence imposed on financier Michael Milken has become as intriguing, controversial and epochal as the defendant himself. Having created, almost single-handedly, the junk-bond market of the 1980s, is Milken now destined to be the catalyst for a new battle in this decade over sentencing of big-time white-collar criminals?
When Milken faced federal Judge Kimba Wood last week, history as well as the fate of a human being was on stage. Defense attorney Arthur Liman said "history will make a judgment on his [Milken's] contribution to the progress of capital formation in this country." Prosecutor Jess Fardella said Milken's tactics "inevitably had a corrosive effect. . . that threatens the entire process of savings and capital formation." Judge Wood was not about to get into that argument, consigning to history another task -- to decide whether "most of your [Milken's] business was ** conducted lawfully."
Early assessments of Milken's rocket ride to the top of Wall Street found the young businessman positively brilliant in identifying high-yield corporate bonds as a means of accumulating investment capital and using their proceeds to take over giant companies. Current assessments point to the greed and recklessness that came to characterize the Milken phenomenon and eventually led to the collapse of the junk-bond frenzy.