Michael Milken is known as the Junk Bond King. In his best year, he earned 500 million U.S. dollars at Drexel Burnham Lambert and is often considered to be the stereotype of a money-hungry Wall Street banker.
Along with other Wall Street greats like Carl Icahn and Ivan Boesky, Milken is said to be one of the characters modeled by Gordon Gekko in Oliver Stone’s 1987 film “Wall Street”.
Milken’s trading in junk bonds revolved around his statistical observation that the default ratio of junk bonds was much lower than many investors assumed it was.
Milken’s success served to make junk bonds attractive to other investors, leading to the junk bond boom of the 1980s.
The golden age of junk bonds, however, ended with Milken’s arrest on charges of insider dealing in 1990.