Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, October 27, 1995 TAG: 9510270130
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: ASSOCIATED PRESS
DATELINE: NEW YORK LENGTH: Medium
The former Drexel Burnham Lambert executive was barred for life from securities dealings and investment advice as part of his historic settlement with the government in 1990.
Milken's exact role in the recent transactions isn't clear. He advised MCI on its decision earlier this year to invest as much as $2 billion in Rupert Murdoch's News Corp.
Milken also gave advice on Turner Broadcasting System Inc.'s recent $7.5 billion agreement to be bought by Time Warner Inc.
There is no obvious evidence that Milken has flouted the terms of his punishment for securities fraud crimes of the 1980s. But because the Milken name has been popping up in big dealings again, suspicion has been raised.
Milken has maintained the close relationships he nurtured with aggressive companies he aided in the 1980s through the sale of high-risk IOUs known as junk bonds. He is credited with pioneering junk bonds as a mainstream way of raising money for fledgling companies, such as MCI and Turner in their infancies.
Determining the exact nature of Milken's recent role in MCI appeared to be the subject of the new government inquiry. Thomas Newkirk, associate enforcement director for the Securities and Exchange Commission, declined to comment on reports the agency was investigating Milken.
But Robert Stewart, an MCI spokesman, said the SEC had requested documents ``regarding advice tendered by Michael Milken.'' He did not elaborate.
A lawyer for Milken defended Milken's role in the MCI deal and said he wasn't aware of an SEC investigation.
Specifically, the SEC barred Milken from the securities industry, including any association with brokers, dealers and investment advisers. But the extent of the SEC's order is something of a gray area.
by CNB