Drexel Burnham Lambert — Museum of the Fallen

The Obituary

Drexel Burnham Lambert turned the junk bond into a weapon of finance, and through Michael Milken’s high-yield desk in Beverly Hills it became the fifth-largest U.S. investment bank by the late 1980s, financing the era’s hostile takeovers. The firm’s dominance rested on Milken’s network and on heavy leverage. Insider-trading investigations — with Drexel banker Dennis Levine at the centre of the scandal — brought a 1989 guilty plea to securities and mail fraud and $650 million in penalties; Milken himself pleaded guilty in 1990. Cut off from credit and stripped of its franchise, Drexel filed for bankruptcy in February 1990 and was liquidated.

Worth remembering

Michael Milken's high-yield desk made Drexel the fifth-largest U.S. investment bank by the late 1980s.
It pleaded guilty to securities and mail fraud in 1989 and paid $650 million in penalties before collapsing.

Gallery

Michael Milken, the Drexel Burnham Lambert junk-bond financier Public domain

Dennis Levine, the Drexel Burnham Lambert banker at the centre of the 1980s insider-trading scandal CC0

Watch

Drexel Burnham Lambert alumni: where are they now? — Bloomberg Originals

Sources

Drexel Burnham Lambert, a major Wall Street investment bank, filed for bankruptcy in 1990 after the junk-bond and insider-trading scandals around Michael Milken Wikipedia
Michael Milken, head of Drexel's high-yield bond operation, pleaded guilty to securities violations in 1990 Wikipedia
Drexel Burnham Lambert dominated junk-bond underwriting under Michael Milken, who by the late 1980s ran an operation accounting for at least half the firm's profits; after a 1988 securities-fraud settlement and Milken's departure, the firm filed for bankruptcy on 13 February 1990. Encyclopaedia Britannica

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