ENCORE: Mike Milken: When Junk Was King | 187

Summary

Scamfluencers – ENCORE: Mike Milken: When Junk Was King | Episode 187 Date: November 10, 2025 | Hosts: Sarah Hagi & Sachi Koul | Wondery

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Episode Overview

This episode revisits the infamous story of Michael Milken, known as the "King of Junk Bonds." Through sharp, irreverent commentary, co-hosts Sarah Hagi and Sachi Koul trace Milken’s rise to power in 1980s finance, the disruptive impact of junk bonds, and his apocalyptic fall amid scandal and federal charges. The conversation unpacks how Milken rewired Wall Street, changed markets (for better and—especially—worse), and later rebranded himself as a philanthropist. The hosts dig into personality, motives, victims, and the lasting legacy of a complex scamfluencer who altered American capitalism.

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Key Discussion Points & Insights

The Rise of Michael Milken and Junk Bonds

• [02:32] Milken the Visionary... or Rigging the System:
  Sarah outlines Milken’s unique approach: he exploited a niche in high-yield, high-risk "junk bonds", allowing companies spurned by banks to access capital—but with huge strings attached.
  "Michael made a mint and left behind the financial hellscape we’re all living in today." (Sarah, 03:16)

• Case Study: Steve Wynn & Golden Nugget Casino ([03:33–07:00])

  • Wynn wanted to expand into Atlantic City. Traditional banks wouldn’t back casinos.
  • Milken’s firm Drexel Burnham (then not a Wall Street giant) stepped in, raising $160 million through junk bonds, revolutionizing casino financing.
  • "The house always wins. Michael has been rigging the global financial system..." (Sarah, 06:51)
  • Wynn later credits Milken for making his empire possible.

• Milken’s Early Life: Driven Outsider ([08:10–11:00])

  • Math savant, workaholic, always the underdog among finance’s Old Guard.
  • At Wharton, feels like an outsider in a sea of WASPs; vows to outdo everyone.
  • "He only cared about bringing the truth. If Mike hadn’t gone into securities, he could have led a religious revival." ([15:20] – former Drexel executive, quoted by Sachi)

Shaking Up Wall Street: The Method & the Madness

• Drexel, Disruption & Cult of Milken ([11:55–14:56])

  • Drexel Burnham takes Milken’s bet. He runs his division as a grueling, insular shop—traders working New York hours in LA, slave wages but immense returns.
  • "It's a slave ship out there. High-priced slavery." ([21:31] – former trader)
  • Staff idolize Milken: "Michael is the most important individual who has lived in this century." ([22:11])

• Junk Bond Conferences & The Predator's Ball ([22:40–28:30])

  • Annual gatherings become legends for excess, power-playing, and conspicuous wealth.
  • Shift from bringing up-and-comers to empowering “corporate raiders” and hostile takeovers—transforming how companies are bought, sold, and gutted.
  • "[Drexel's strategy] levels the playing field. The small can go after the big." (Fred Joseph, read by Sachi at [27:09])
  • "The shift … is so big, it earns the conference a new nickname—from here on, people call it The Predator’s Ball." (Sarah [27:23])

The Deals: How Milken and Drexel Changed Everything (for the Worse)

• Ted Turner, MGM, and the Spiderweb of Conflicts ([31:18–35:35])

  • Milken arranges convoluted deals—secret stock purchases, hiding conflicts, making fees at every stage.
  • He bankrolls some of the 1980s’ most aggressive takeovers—including Turner’s MGM purchase, Revlon, Northwest Industries, and more.
  • "In addition to being a talented creative genius, Michael is among the most avaricious, ruthless, venal people on the face of the earth." ([35:35] – Drexel colleague, read by Sachi)

• The Real-World Fallout ([36:12–38:13])

  • Hostile takeovers create a corporate culture of fear, perpetual cost-cutting, layoffs, R&D neglect.
  • Average workers become collateral damage as markets turn volatile and inequality rises.
  • "A volatile market … restructuring, overhead cutting, layoffs ... All while Michael and his rich buddies get even richer. Does that sound familiar to you?" (Sarah, [38:13])
  • Sachi: "This sounds like everything that has ever happened in our entire lives." ([38:17])

Exposure: Investigations & Media

• Investigative Journalist Connie Bruck & "The Predator’s Ball" ([39:03–41:13])
  • Connie Bruck senses “something there” due to Drexel’s extraordinary profits. She’s offered hush money by Milken—twice.
  • "He just hadn't offered a big enough price …" "What would I do for integrity for the rest of my life?" (Connie Bruck on Fresh Air, read by Sachi [40:41])
  • Connie presses on, exposing Drexel’s rot. The book eventually becomes a bestseller as the scandal explodes.

Downfall: Insider Trading, Betrayal, and Collapse

• Ivan Boesky, Snitches, and the SEC Raid ([43:03–49:26])

  • Drexel execs and raider Ivan Boesky are swept up in federal investigations and snitch on each other.
  • Tension and paranoia dominate Wall Street.
  • "There will be no honor among these thieves." (Sarah, [49:28])

• Public Relations Meltdown & Desperate Rebranding ([51:19–53:44])

  • Drexel flails with music videos and ad campaigns (e.g., “Junk Bonds Keep America Fit”), trying to save face as scandals mount.
  • They tout Milken as a "national treasure" and push philanthropic gestures, but the narrative turns hostile.

• Legal Consequences & the End of Drexel ([54:03–57:11])

  • Drexel’s own lawyers become convinced of criminality ("the world of sleaze" tapes).
  • Drexel pleads guilty to six felonies and pays the largest securities fraud fine at the time ($650 million).
  • Michael Milken is indicted on 98 criminal counts.

• Michael's Courtroom Drama: Confession & Sentencing ([59:09–62:49])

  • Milken eventually pleads guilty to six violations, is fined $600 million, and is sentenced to 10 years in prison (serves less than 2).
  • "I realize that by my acts I have hurt those who are closest to me. I am truly sorry." (Milken’s courtroom confession [60:30])
  • Sachi: "This guy's kinda pitiful when he gets in trouble, huh?" (61:54)

The Aftermath: Rebranding, Reputation, and Enduring Influence

• Philanthropy as Reputation Laundering ([62:49–66:38])

  • After serving his time, Milken pivots into philanthropy, notably cancer fundraising, and becomes a Washington darling.
  • "Here is one of the most successful men … What that says is, no matter what your success, financially or otherwise, no money, no power can prevent a deadly disease." (Tony Coelho, read by Sachi, [64:09])
  • Hosts discuss how illness and charity enable Milken to rewrite his public image.

• Continued Influence Despite a Lifetime Ban ([66:38–68:00])

  • Milken keeps working as a financial power broker behind the scenes, makes millions as a “consultant,” is partially rehabilitated, and eventually pardoned by Trump in 2020.
  • His Beverly Hills "Milken Institute Global Conference" becomes a new hub for global movers and shakers, headlined recently by Elon Musk.

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Notable Quotes & Memorable Moments

• On Milken’s Propaganda:
  “They want to change things, but they also want to get rich doing it.” (Sarah, [13:27])

• On Corporate Worship:
  “Someone like Mike comes along once every 500 years.” (Sarah, quoting ex-employee, [22:11]) Sachi: “I would be embarrassed to say these things out loud about anybody…” ([22:43])

• On Greed as Virtue:
  “Greed is all right … I think greed is healthy. You can be greedy and still feel good about yourself.” (Ivan Boesky at Berkeley [44:15])

  • This line inspired Gordon Gekko’s "Greed is good" speech in Wall Street.

• On Milken’s Downfall:
  “There will be no honor among these thieves.” (Sarah, [49:28]) “It's just like podcasting.” (Sarah, [55:31])

• On Public Image (and Overwrought Sympathy):
  “This guy's kinda pitiful when he gets in trouble, huh?” (Sachi, [61:54]) “He has always been in control … and I think this is the first time his life had been derailed.” (Sarah, [69:02]) “His actions were so quietly sinister that most people don’t even know they are to pin the blame on someone like him.” (Sarah, [69:26])

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Timestamps for Key Segments

• [02:15] – Intro: Setting the stage for Milken’s impact on Wall Street and ordinary Americans.
• [03:33–07:00] – Steve Wynn and the creation of the casino/junk bond pipeline.
• [08:10] – Milken’s early life as an outsider and relentless overachiever at Wharton.
• [11:55–14:56] – Milken’s quirks, work ethic, and cult-like office environment.
• [22:40–28:30] – The evolution of junk bond conferences into “The Predator’s Ball” and the emergence of corporate raiders.
• [31:18–35:35] – The Ted Turner/MGM deal: conflicts, scams, and the machinery of self-dealing.
• [36:12–38:13] – Real-world fallout: the rise of precarity for American workers.
• [43:03–49:26] – Ivan Boesky, the SEC investigation, and paranoia on Wall Street.
• [59:09–62:49] – Milken’s sentencing, emotional breakdown, and prison term.
• [62:49–66:38] – Reputation laundering via philanthropy and ongoing behind-the-scenes influence.
• [67:53–68:28] – Reflection: Milken as the blueprint for modern white-collar scams.

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Tone, Style, and Key Takeaways

• Tone: Witty, acerbic, and critical, but loaded with relevant pop culture context and modern analogies.
• Language: Irreverent, conversational, occasionally darkly humorous (“It’s just like podcasting. I’d slit your throat in a heartbeat.”).
• Perspective: The hosts don’t just describe crime—they repeatedly return to the ripple effects on ordinary people, the structural legacy, and the cyclical nature of financial scams.
• Cultural Legacy: Milken is recognized as the grandfather of process-dense, opaque scams that make Wall Street “feel like it’s full of shit.”
• Milken Today: Continues to influence finance and policy despite a criminal record, using philanthropy and networking to launder his image and maintain power.

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Closing Thoughts

The episode uses Michael Milken’s story as both a wild true crime narrative and a lens on the roots of our present-day financial order. It’s a cautionary tale about unchecked ambition, the seductions and dangers of “disruption,” and the people who write the rules while the public is left paying the price.

“He claimed to be so hell bent on changing the system, but it actually was just changed to work in his favor… It’s scary to feel like somebody is writing rules you don't understand for a game that you barely knew you were playing—but you are playing no matter what.”
—Sarah Hagi, [69:26–69:38]

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Further Reading Cited:

• Connie Bruck’s “The Predator’s Ball”
• James B. Stewart’s “Den of Thieves”
• Edward J. Epstein’s LA Times profile of Milken

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Summary compiled for Scamfluencers fans and newcomers. For the full drama (and the contagious hosts’ chemistry), listen to the original episode on Wondery.

Transcript

[Sarah Hagie]

Hey there, Scamflancers fans want to be the first to know how these wild scams unfold. Join us on Patreon to get early access to episodes, ad free listening, and exclusive content that reveals even more of the drama. Just search for Scamfluencers on Patreon and dive deeper into the scandal. We'll be back next week with all new episodes of Scamfluencers. But first, let's rewind for a moment. Remember our episode on Michael Milken, the junk bond king who basically rewired Wall street in the 80s?

[Sachi Cole]

Yes, I do. Milken was a junk bond pioneer who made billions funding corporate raiders and manipulating global markets. He helped fuel the decade of excess and then crashed hard when the government came after him for violating securities and tax laws.

[Sarah Hagie]

Well, since our last episode aired earlier this year, Milken has been keeping busy, but in a very different way. On September 20, he opened the Milken center for Advancing the American Dream, or MADD for short. It's a new museum in Washington, D.C. that is, quote, a cultural institution focused on illuminating pathways to opportunity for all.

[Sachi Cole]

I love that.

[Sarah Hagie]

I didn't know you could open a.

[Sachi Cole]

Museum to your own nonsense. I'm going to try that.

[Sarah Hagie]

Yeah. It's basically a museum of capitalism. And the museum is located across the street from the White House. And it features five buildings of exhibits and immersive experiences that, according to a press release, allow visitors to explore how ingenuity and perseverance have shaped the American dream across generations. Something is telling me there's more to the story than just that.

[Sachi Cole]

It also recenters historical stories around bankers and other lending institutions. Take, for example, the Civil War. At mad, the focus is on how the war introduced the greenback, AKA federal paper money.

[Sarah Hagie]

Enjoy this encore and we'll be back next week with a very different kind of empire. One built on secrets, betrayal, and a CIA agent's double life.

[Sachi Cole]

But with Milken now curating the story of the American dream, we thought it was the perfect moment to revisit our episode on how he built and then rebuilt his empire.

[Sarah Hagie]

Sachi, we've been doing this show for years now, and I have to ask, do you feel any closer to understanding how the stock market works at all?

[Sachi Cole]

No, no, I think I understand it less. I'm further from understanding it. I think now more than ever.

[Sarah Hagie]

Yeah, it's like two steps forward, three steps back. But today is our lucky day because we have another story about an investor gone wrong. But this one is maybe the biggest doozy of them all. Michael Milken used a unique take on bond investing to become a self made billionaire in the 80s. He seemed to be ushering in a new era for finance in America where more people had access to cash. But this did not end up being a robinhood scenario. I'm going to tell you how Michael made a mint and left behind the financial hellscape we're all living in today. I need a cigarette. It's Memorial day weekend in 1978 and the Atlantic City boardwalk is packed. New Jersey recently voted to legalize gambling and the first casino in the city is celebrating its grand opening. Steve Wynn is especially excited about this. He's in his mid-30s, with a full head of dark hair, a deep tan and an easy smile. He already owns the Golden Nugget casino in Las Vegas. And he's here today to check out the east coast gambling scene. Steve elbows his way through the crowds of people swarming the craps table tables, poker games and slot machines. He sees the writing on the wall. Gambling in Atlantic City is going to be huge. And Steve wants in. He knows that opening a Golden Nugget in Atlantic City would be a sure bet if he could get the investment capital. But at this time, most banks won't lend to casinos. They see them as threats to their reputations because of the stereotype that casinos do business with the mobile. Plus, this is a big swing for Steve. Golden Nugget isn't a big time company yet. It's only worth about $5 million. To enter the Atlantic City scene, he'll need to raise hundreds of millions of dollars. So Steve starts asking around for alternative investors. And a friend tells him there's one guy who can get this done. A trader named Michael Milken. On the surface, Michael. Michael doesn't seem like a real player. The investment firm he works at, Drexel, is on the smaller side and he isn't even in their New York office. He's in la, about as far away from Wall street as you can get. But Steve is determined to make this deal. So he flies to California and visits Michael in his office in Century city. Michael is 32 years old. He's tall and as thin as a rail and has a very intense demeanor. Steve. Steve shares his vision for Atlantic City and Michael sees the potential in it. He knows that if Drexel can help Steve's gambling company, they'll become the go to place for casinos to get funding and corner a very lucrative market. But now they need to convince Michael's bosses back in New York. Michael tells Steve he should meet with them and suggests he dress conservatively. For when he asks if Steve owns shoes with laces, Steve has to admit that he doesn't.

[Sachi Cole]

It's so crazy to think about someone like Steve Wynn in a time in his life where he was like nothing but boat shoes. Yeah, like he didn't have every tuxedo.

[Sarah Hagie]

Shoe in the world. Also, Steve Wynn is just Steve Wynn. And not thinking of like Steve Wynn the casino, just some guy named Steve. Even though Steve isn't big time yet, Michael assures him that he can persuade his firm's leaders to see things his way. What Steve doesn't know is that Michael is downplaying his influence. He's actually the most powerful person at Drexel. Going to see his bosses is basically a formality. What Michael says goes. When they get the green light, Steve and Michael get to work and they're able to raise $160 million. A couple years later, Golden Atlantic City opens to huge fanfare. Everyone wins. Steve gets his wildly successful casino, Drexel becomes a go to firm for gaming interests. And Michael gets massive fees for putting it all together. Many years later, Steve will say that Drexel, especially Michael, quote made him the Golden Nugget isn't the only risky bet Michael is willing to take on. Because his business operates just like Steve's casino. The house always wins. Michael has been rigging the rules of the global financial system for years. And soon everyone will know it.

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[Sarah Hagie]

From Wondery. I'm Sarah Hagie.

[Sachi Cole]

And I'm Sachi Cole.

[Sarah Hagie]

And this is Scamfluencers. Come and give me your attention. I won't ever learn my lesson. Turn my speakers to 11. I feel like a legend. Michael Milken is known as the king of junk bonds. In the early 80s, he pioneered a novel way to finance companies that traditional investors normally wouldn't touch. His high risk, high reward investing strategy upended decades of Wall street norms. And it made celebrities out of Michael and the corporate raiders he funded, like T. Boone Pickens, Rupert Murdoch, and Carl Icahn. Michael did make it possible for smaller companies to access capital, but he did it by breaking norms, ethical codes and financial regulations in order to manipulate the system at every turn. Though when stockbrokers turn into snitches, even his billions can't protect him. I'm calling this one Michael Milken when junk was king. Gotcha. It's early fall 1968, and Michael Milken is at a party for the new class of the University of Pennsylvania's prestigious Wharton School of Business. He's excited to meet his new classmates, people just as obsessed with finance as he is. Michael's 22 years old. He's a tall, thin Jewish guy who's already balding. And he's been a serious nerd since he was little. Growing up in a suburb of Los Angeles, Michael wowed his grade school classmates by doing complicated math in his head. At age 10, he started helping his accountant dad prepare clients tax returns by sorting checks and balancing checkbooks. In high school, he only slept three or four hours a night and didn't drink, smoke, or do drugs. He didn't even drink carbonated beverages. But he still managed to make a ton of friends. He was a cheerleader along with his classmate Sally Field, and was even voted most popular. He started dating Lori, a shy, bookish girl with wide eyes and dark hair. She was voted most likely to succeed. When Michael enrolled at UC Berkeley in the mid-60s, the student body was fired up by anti war protests. But that wasn't really Michael's scene. Instead, he focused on his managing money. He convinced some of his fraternity brothers to let him manage their investment portfolios. By offering a pretty good deal, he took 50% of all profits and 100% of the losses. In 1968, Michael and Laurie graduated college and got married just before Michael started business school at Wharton. Here's a picture of the happy couple. Sachi.

[Sachi Cole]

Okay. I mean, he just looks like some man, but she looks so cute.

[Sarah Hagie]

Yeah. She looks so cute.

[Sachi Cole]

It's such a 60s wedding. She's got like this like fun veil and this like baby doll dress. She's wearing long gloves. She's so cute.

[Sarah Hagie]

Yeah. Well, Michael is probably thrilled to leave the west coast hippies behind and get down to business with his new like minded classmates in Phil. But at his orientation dinner, he looks around the room and realizes that he is once again completely out of place. The Wharton guys are all blue blood wasps with Ivy League credentials who smoke pipes and navy blazers. It's like they all speak a foreign language and Michael doesn't know the translation. Michael thought he was back in a place where he'd fully fit in, but all he feels is a mixture of mockery, snobbery and shame. That night he tells a friend he's going to show up all these jerks and finish number one in the class. He doesn't quite make that happen, but he sets out to find a job where he can use the old guard's own rules to hit them where it hurts their pocketbooks. In 1974, Fred Joseph is settling into the New York headquarters of his new firm, Drexel Burnham and Company. Sachi. This firm changes names a lot throughout this story, so we are just going to call it Drexel. Fred has been hired as head of Corporate Finance. He's 37 years old with graying hair and the thick frame of a former boxer. He was a COO and partner at his previous firms and the brass at Drexel are putting him on the executive track. Like Michael, Fred doesn't come from a traditional finance background. He grew up as the son of a cab driver in a blue collar neighborhood in Boston. Sure, Fred went to Harvard for both undergraduate and his business degree, but he was on scholarship and he boxed and drove cabs on the side to make money. Fred thinks of himself as an outsider and the financial industry as an old boys network in need of a major shakeup. Drexel is the perfect firm for him. It's a finance company, but it was founded in Philadelphia rather than New York. The firm has been modestly successful, but lately it's been hemorrhaging clients and talent and now it's in dire straits. Fred sees this as an opportunity and he's promised to make Drexel as big as Goldman Sachs within 15 years.

[Sachi Cole]

You know, it seems like these guys sort of want to like move fast and break things and they want to change how things work, but it also seems like they want to engage in the system so they're still Interested in using the same mechanism that they think is broken.

[Sarah Hagie]

Yeah, like they say, they want to change things, but they also want to get rich doing it. And to make that happen, Fred needs to find a way to give Drexel an edge. Now he's on his way to meet a standout young employee who might be the key. Michael Milken. Michael has been working at Drexel for four years. A year earlier, he convinced them to give him his own department. He focused on a super niche business, trading in high yield bonds, sometimes called junk bonds. The bonds have a higher risk of default, but if all goes well, the payouts can be big. They're basically high risk, high reward bets. And Michael's been a big winner. Drexel gave him $2 million to invest, and he made 100% returns. However, his bosses at Drexel warn Fred that this wunderkind is kind of a weirdo. He commutes to the New York office from a suburb outside of Philadelphia. But Michael refuses to take the train, where he would have to socialize with lots of other Wall street types. Instead, he gets on a bus at 5:30am wearing a toupee, a leather aviation cap with the ear flaps down, and a headlamp. He spends a two hour commute reading financial filings by the lights strapped to his head. No small talk, no interruptions. This is a terrible way to live. It is a terrible way to live, but it is also so tempting to be like, I can forego all the small talk I have to make with familiar strangers.

[Sachi Cole]

Of course I admire the headlight. I think the most he is doing.

[Sarah Hagie]

What people on TikTok say they do to, like, be successful. Yeah, but he's doing it for real. Fred has also heard that Michael can be difficult. He's patronizing and uncompromising, absolutely sure that his way is right. Can you read what one former Drexel executive later said? Yeah.

[Sachi Cole]

He said, quote, he simply didn't have the patience to listen to another point of view. He was useless in a committee in any situation that called for a group decision. He only cared about bringing the truth. If Mike hadn't gone into the securities business, he could have led a religious revival movement. I get this myth making around male executives, but I feel like it's always presented this way where it's like he was an asshole, but he was so effective. Like, he would yell at people, but people would listen to him. Like, fuck off. I hate it.

[Sarah Hagie]

Yeah, you know, it's like one of those inspirational stories which, as you will learn, does not End well, sounds right. Fred walks onto the trading floor where Michael is frantically talking on the phone and watching the ticker tape. A live feed that shows stock price updates. Fred introduces himself, but Michael never stops moving or talking on the phone or barking orders at the traders working for him. It's a bit disorienting, but Fred also relates to Michael right away. They're two of just a handful of Jewish employees at the firm and they're both ambitious as hell. Fred sees something special in Michael. He might seem scattered, but this kid is making tons of money for the firm and Fred is going to find a way to maximize his value. Eventually, Michael calms down enough to explain his investment strategy to Fred. He's focused on a niche way of raising money for companies that would otherwise struggle to get funding. A company's ability to get loans depends on its credit rating. The same way you have a credit score. The most established, well run and stable companies get a triple A rating. And as a result, banks are happy to give them loans at low interest rates. Companies that have a lower profile or are less financially secure get lower ratings. And banks charge them much higher interest rates for loans. Some companies get such poor ratings that banks won't deal with them at all no matter how high the interest rate goes. Michael tells Fret that he thinks the credit rating system has a blind spot. It relies on the biases of the WASPy snobs in charge of. In his opinion, the two credit rating institutions tend to undervalue some promising companies just because they struggled in the past or because they're seen as unsavory, like casinos that has left an opening in the market. Invest in companies with lower ratings that can turn things around and be profitable if they had a little extra cash.

[Sachi Cole]

Okay, I do appreciate that the point of this is to get money into the hands of people who aren't likely to be able to get these loans. So I can see how this is like a good idea that maybe gets perverted over time.

[Sarah Hagie]

Yeah, I mean, they see them as a way to make more money. You know what I mean? It's not like this altruistic, pure kind of thing, so.

[Sachi Cole]

But I can see how it's at least helpful.

[Sarah Hagie]

Exactly. And Fred is intrigued. He agrees that tradition has blinded Wall street to major opportunities. Michael explains that he's made money by finding companies with bad ratings that could regain substantial value. Then he pitches them to unconventional investors, guys with a lot of money but who can't get meetings with fancy Wall street firms. These guys are more interested in making High risk, high reward bets. And these companies and investors will both pay Drexel gigantic fees for connecting them. Michael is the one bringing everyone together, making deals happen and giving everyone the chance to make money. And he's collecting a hefty cut for Drexel. This is the kind of advantage Fred has been looking for. If established firms aren't getting into junk bonds, that means Drexel can have the market practically to itself. Fred is convinced he has a true investment star on his hands. And he decides that if he wants to make his dream of running the biggest firm on Wall street come true, there's one surefire strategy. Give Michael whatever he wants. It's a snowy morning in late 1977. Michael wakes up to discover the pipes in his house have frozen solid. And when he backs out of the driveway, it's slick with ice and he damages his car. This is the final straw. He hates it on the East Coast. And by this point, Michael's had so much success at Drexel that that he feels empowered to make a huge demand. He wants to move back to LA and take his entire division with him. This has been a long time coming. Laurie wants to move back west and has a habit of playing California Dreaming on their record player as a not so subtle hint. And in la, Michael won't have to worry about his coworkers. Some people at Drexel don't really get what Michael is doing, and they ask a lot of questions. Being thousands of miles away would insulate him from the firm's bureaucracy and let him operate his division exactly the way he wants. His boss agrees. And because he's made them all so rich, the 20 or so other guys who work for Michael agree to move with him. In fact, Michael's such a rising star in the world of finance, his move merits a story in the New York Times. Here's a picture from that article. Saatchi.

[Sachi Cole]

Isn't it funny that the New York Times thought that this guy moving from one place to another merited a spread in the Times? And then the spread itself does look like a yearbook page where he's shown in his environment, like, looking stressed and tough, wearing a suit.

[Sarah Hagie]

Yeah, it's totally one of those articles that's like, look at this fantastic new person who we will not question further. No, no follow ups. No follow ups. Looks good. Well, over the fourth of July weekend, M. Michael and Laurie drive across the country to relocate. Michael claims she drove while he sat in the backseat reading corporate financial filings. Michael and Laurie buy a place in Encino that used to be a guest house on Clark Gable's estate. He pays $750,000 for it, the equivalent of about $3.6 million today. And his division of Drexel sets up shop in a skyscraper in Century City. Michael quickly sets the tone for the west coast office. He demands the traders work New York hours. So they need to be at their desks by 4.30am and they're expected to work until 8pm, a 17 hour day. But he works even harder. The traders often arrive at the office to find notes Michael has already left on their desks. The trading floor is cramped, but that's how Michael likes it. He sits at an X shaped desk in the center so he can see, hear and scream at everyone else. Breakfast and lunch are catered and Michael hires women to pick up dry cleaning for his employees, go to the post office for them, wait at their houses for repairmen and deliveries, and take care of pets. A former trader later said, quote, it's a slave ship out there. High priced slavery. But even though conditions are brutal, his employees seem to worship him. One later says, quote, michael is the most important individual who has lived in this century. Another says, someone like Mike comes along once every 500 years.

[Sachi Cole]

I would be embarrassed to say these things out loud about anybody. And also, I just don't think it's true that someone like Mike comes along once every 500 years because we have done 150 episodes of this show, so there's clearly a lot of versions of him around.

[Sarah Hagie]

You need to also realize these guys are richer than they ever thought they'd be. Yeah. And so they are willing to say, Michael is my mom. Yeah. I mean, they're overworked and he's made them rich, so of course they're going to do whatever he says. Well, before he left the East Coast, Michael had started an annual conference to spread the word about junk bonds. It was a way to bring companies and investors together. Now he hosts a conference in LA in 1979. They all sit at a conference table and break down financial records. It's Michael's idea of a perfect day. Being the head of a new office and the leader of the annual junk bond conference positions Michael as the head of a new movement. He's rich, influential, poised to single handedly reshape finance and leave his haters in the dust. It's spring 1985. At the Beverly Hills Hilton, the site of this year's annual junk bond conference, 1500 of the richest and worst men in the world are gathered to eat Shrimp ceviche down tequila shots and cook up ways to tilt the financial system in their favor. It's been seven years since Michael moved to California. In that time, his junk bond business has boomed. He's proven that he can raise hundreds of millions, even billions of dollars for companies like MCI Communications, MGM and Golden Nugget. And of course, Michael and Drexel get their cut. The previous year alone, Drexel is estimated to have made at least $250 million in earnings. @ this point, Michael's taking home more than $135 million in yearly compensation. That's equal to more than $400 million today. On top of that, he's asking for equity in some of the companies he helps get funding for. And he's making investments based on what he knows about Drexel's clients, which you are definitely not supposed to do. But he's so far from Drexel's headquarters and is making them so much money that his boss doesn't seem interested in asking too many questions. Great. Good.

[Sachi Cole]

Of course you shouldn't ask too many questions.

[Sarah Hagie]

I wouldn't. Just don't ask. Don't worry about it.

[Sachi Cole]

Trust the process.

[Sarah Hagie]

Yep.

[Sachi Cole]

Out of sight, out of mind. That always works.

[Sarah Hagie]

Well, everyone at the conference today has bought into Michael's theory about junk bonds. The higher the risk, the higher the reward. But Michael and his boss Fred have a brand new approach to introduce to investors. This year, they're still focused on making Drexel the biggest firm in the world. To do that, they want to bring Drexel into the lucrative mergers and acquisitions space. It's a bigger market with the chance to make even more money. Right now, the space is dominated by high profile investment firms who fund large companies taking over smaller ones. Michael and Fred decide this is another chance to fund the underdogs and corner a new market. They want to fund individual investors who are looking to do hostile takeovers of companies, AKA corporate raiders. Have you heard this term before, Sachi?

[Sachi Cole]

Yeah, it's basically when somebody tries to come in and take over a company, it's usually like an activist investor like Carl Icahn.

[Sarah Hagie]

Well, I did not know that before this episode, but yes. Banks have historically been hesitant to fund corporate raiders. So Michael and Fred sense a big opportunity. At the conference, Fred addresses the crowd and explains their needs. Strategy. If an investor wants to make a play at taking over a company, Drexel will organize its network to raise huge amounts of money. Michael only has to make a few calls to his Rolodex of investors telling them what bonds to buy. No traditional banks required. It is impossible to overstate how big a deal this announcement is. This is a fundamental shift in the financial landscape. Sachi, can you please read how Fred describes this development to the audience? Yeah. He said, for the first time in.

[Sachi Cole]

History, we've leveled the playing field. The small can go after the big.

[Sarah Hagie]

It's so funny that they are so.

[Sachi Cole]

Compelled to make it seem like they're doing something noble in their pursuit of stuff and money.

[Sarah Hagie]

Exactly. And the shift to empowering hostile takeovers is so big, it earns the conference a new nickname. From here on out, people call it the Predator's Ball. Oh, my God. Some attendees are eager to start living up to this name, and they don't even have to wait for the conference to end. One evening, after a full day of conference sessions, a carefully selected group is invited back to the Beverly Hills Hotel, Bungalow 8, for a very 80s cocktail party. Party wives are explicitly banned, and beautiful women, some of them rumored to be sex workers, mingle with the businessmen as they wheel and deal and partake in a lot of booze and illicit substances. But this isn't all sex and coke. T. Boone Pickens, Nelson Peltz, Sir James Goldsmith, and Carl Icahn are among the attendees huddled together, plotting takeover bids. The next day, at the final dinner of the conference, Drexel plays a parody of the Ghostbusters theme song with the lyrics, who you gonna call when you want money Fast, Drexel. Then Diana Ross performs a medley of her greatest hits. But Fred's announcement is what keeps everyone buzzing. Drexel is bankrolling anyone willing to take a big swing. Reagan is in office, and deregulation is king. Everyone wants to get rich. And Drexel's approach to corporate takeovers is about to fundamentally change the world economy forever. You know that sinking feeling when you're hit with yet another overdraft fee? I have been there. Between surprise charges and waiting days for my paycheck to clear. Managing money used to be a constant source of stress.

[Sachi Cole]

Oh, yeah. Younger me would have really benefited from this. With Chime's direct deposit, you can get your paycheck up to two days early and never worry about overdraft fees anymore, thanks to their Spot Me feature that covers up to $200 on debit card purchases and cash withdrawals. In fact, Chime has spotted their members over $30 billion. That's real impact.

[Sarah Hagie]

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[Sachi Cole]

Work on your financial goals through Chime today. Open an account in 2 [e-mail] scampod that's chime.com scampod Chime feels like progress.

[Sarah Hagie]

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[Narrator/Other Host]

I'm Raza Jaffrey and In the latest season of the Spy who we open the file on Morton Storm, the spy who lived inside Al Qaeda. Unfulfilled with his life in a notorious Danish biker gang, Morton Storm is lost. One afternoon he stumbles into a library looking for answers. He finds them in the form of a book about Islam. The towering ginger haired Dane doesn't know it yet, but that moment will hurl him into a world of radicalism and see him rise through the ranks of militant Islamist organization Al Qaeda, only to suffer a huge crisis of faith. He turns from devotee to spy tasked with rooting out some of Al Qaeda's most feared generals. The CIA and MI5 bid for his allegiance as he loses himself in a life of cash laden suitcases, double crosses and betrayal. Follow the Spy who on the Wondery app or wherever you listen to podcasts or you can binge the full season of the Spy who Lived Inside Al Qaeda early and ad free with Wondery.

[Sarah Hagie]

I feel like A few months after the 1985 Predator's Ball, Michael gets a visit from Ted Turner. Ted is in his mid-40s, with a thick head of hair and an impressive mustache. He's a mogul who turned his father's billboard business into a media empire. He owns TBS and founded CNN, the first 24 hour news network. Now he wants Michael's help in making a major buying MGM, the film studio. Ted wants MGM's library of classic films like Gone with the Wind and the wizard of Oz as content for tbs. But MGM is a huge company and Ted's a bit strapped for cash at the moment. He needs Michael's help. At the end of the summer, Ted announces his intent to buy mgm. Now Michael needs to find a way to make sure this deal happens. So he calls his pal Ivan Boeski. Ivan is in his late 40s tall, trim, with light eyes and a pretty psychotic smile. He always wears black three piece suits with a gold watch chain like the one Winston Churchill wore. Like Michael, Ivan isn't your typical finance guy. He's from Detroit and his dad ran a chain of topless bars. But Ivan married into money and now runs his own arbitrage firm, which basically means he bets millions of dollars on the outcomes of corporate takeovers. He's a millionaire many times over, thanks to his willingness to do some not exactly legal wheeling and dealing. Oftentimes these deals are with Drexel. By this point, he talks to Michael on the phone two or three times. A.

[Sachi Cole]

That's a lot. That's a lot of money being moved around.

[Sarah Hagie]

It sounds like they're making money moves. Yeah. Well, now Michael pitches him a new deal. If Ivan buys shares in MGM for Michael and keeps Michael's ownership secret, they'll split the losses or gains 50, 50. By having Ivan purchase the stock, it looks to the outside world like a savvy investor has confidence in Ted's bid. Riding that wave of investor confidence, Michael will convince his other clients to buy MGM stock, which will ultimately help Michael raise the money needed to bankroll Ted's takeover of the studio. And Ted isn't Michael's only client in the deal. Michael is also representing mgm. The conflicts of interest are absolutely insane, but no one seems to bat an eye. Michael is working every angle of this deal, making money at every point along the way. He and Drexel raise the $1.4 billion that Ted needs, and the deal goes through. Drexel earns more than $66 million in fees for financing the deal. And Michael and Ivan make $3 million off the stock they illegally collaborated to buy.

[Sachi Cole]

You know, it sounds like Michael has figured out something kind of ingenious in this scam, which is that there's so many little steps to these financial transactions. And so he can peel a little bit of money off at all of these layers. Yes, it's probably a lot harder to catch it.

[Sarah Hagie]

Yeah, it's so sophisticated, it would be next to impossible to catch. And he's making everyone so much money, who's going to question him? Ted is just one of many upstarts getting a boost from Michael. Drexel helps Nelson Peltz, a man mostly known for driving his family's frozen food business into bankruptcy, raise the money to buy the national can Corporation for $460 million. Drexel also raised $500 million to help a Chicago financier buy out Northwest Industries and Drexel helped fund Ron Perlman's $2.7 billion takeover of Revlon. At this point, Drexel controls about half of the $150 billion junk bond market and is making more than $1 billion in annual revenues. But the person gaining the most is. Is Michael. He has a way of carving out profit for himself on all his deals, which his co workers at Drexel have started to notice. And they think Fred is willingly turning a blind eye to his constant self dealing. Can you read how one Drexel worker later described Michael?

[Sachi Cole]

Sure. Quote. In addition to being a talented creative genius, Michael is among the most avaricious, ruthless, venal people on the face of the earth. Okay, I love that. That is iconic.

[Sarah Hagie]

I would love to be talked to.

[Sachi Cole]

Like this powerful, talented, creative genius. The worst person in the world. That's amazing.

[Sarah Hagie]

He has to hand it to him, however. He is the most evil man to have ever existed. Yeah, well, Michael is basically in control of a huge segment of the global financial system. With just a few phone calls, he can change markets and raise billions. But the deals he's enabling come with strings attached. And the fallout has real consequences for average Americans. In the early summer of 1986, just a few months after he closed the MGM deal, Ted Turner sits for an interview in his office in Atlanta. There are trophies covering the walls, including one for winning the America's cup yacht race in the late 70s. Ted sits across from a reporter from Fortune magazine and kicks his bare feet up on his desk. He rolls a set of glass Tiffany dice in his hand. As the reporter asks him whether the deal with MGM was a bad idea, he says, quote, I may make a mistake someday, but buying MGM wasn't one of them. Ted sounds confident, but to close the deal, he had to take on an enormous amount of debt. Now he owes Drexel and the other investors a lot of money. And if he doesn't pay it back quickly, he'll face sky high interest rates. So he's left with one real selling off assets to pay everyone back. Ted has no choice but to strip the company for parts. In fact, just a few months after this interview, Ted ends up selling the home video, television and film production units of MGM back to the guy he just bought the studio from. Well, the onslaught of hostile takeovers, or even just the threat of them, has created a new normal for corporate America. A volatile market with tons of mergers and takeovers leading to restructuring, overhead cutting, layoffs, and drastic cuts to research and development. Even companies that aren't the target of a hostile takeover have to change how they operate. They've got to focus more on takeover defense than developing long term sustainable business practices. Industries are becoming destabilized. The average worker is facing more precarity. All while Michael and his rich buddies get even richer. Does that sound familiar to you?

[Sachi Cole]

I know you're trying to tip me towards something in particular, but this sounds like everything.

[Sarah Hagie]

Exactly. It sounds like everything that has ever happened in our entire lives. Comforting. Well, like The wizard in MGM's wizard of Oz, Michael is running everything behind the scenes. But someone is about to pull back the curtain. Ted Turner isn't the only one facing scrutiny from the press. Around the time of the MGM deal, a journalist from the American Lawyer magazine starts taking an interest in Michael's business. Connie Bruck is a 40 year old senior reporter with dark shoulder length hair with bangs. And she looks just as sharp in a power suit as the lawyers and businessmen she covers. I've got a picture of her from around this time. Sachi, what do you think?

[Sachi Cole]

She's Lois Lane. I love her already. She looks like she doesn't take any shit. She's wearing an oversized blazer, a pearl necklace and she has a very sensible haircut.

[Sarah Hagie]

I know, it's a great blowout. I mean, she looks like journalist I trust. Yeah. Well, Connie is curious about the world Michael inhabits. A few years ago she wrote a profile of his frequent business partner Ivan for the Atlantic. She's fascinated by Michael and his band of raiders who are, as she later writes, quote, leading the revolt of an underclass to scale the walls of corporate America and depose the rich, credentialed and powerful. While she actually kind of admires Michael, Connie has been a reporter long enough to know that when someone is making that much money, there's probably a story there. So she's writing a book about the junk bond movement. Connie's first move is to ask Fred if Drexel will cooperate and surprisingly, he says yes. Fred is very proud of how much money the firm is making and he gives Drexel employees the green light to talk to Connie about their success. But while Fred might be excited about the book, Michael is pretty hostile to the idea. Connie goes to Boston where Michael is speaking to a room full of finance bros. After the speech, Connie approaches him and explains her project. He tells her he doesn't want her to write the book. When she says she's writing it anyway, he offers to pay her the amount her publisher is paying her to not write the book. Here's Connie, a couple of years later, telling NPR's Fresh Air about what happened next.

[Sachi Cole]

I said that was fine, but what would I do for integrity for the rest of my life?

[Sarah Hagie]

Then he said, or why don't we.

[Sachi Cole]

Pay you for all the books that you would have sold if you had written it?

[Sarah Hagie]

So I guess what he thought was.

[Sachi Cole]

That he just hadn't ordered, had not offered a big enough price the first time. You really have to admire Connie because for most writers to be offered a paycheck, not to write, that is a gift. And it is a gift many of us would take.

[Sarah Hagie]

Yeah. But also, if he's willing to pay that much money, then clearly she is close to, like, a major, major scoop. Yeah.

[Sachi Cole]

It sounds like he's afraid of her.

[Sarah Hagie]

Yeah. Basically, Michael wants Connie to stay out of his business. But thanks to Fred's cooperation, Connie still learns a lot about him. His colleagues and clients are willing to talk, and increasingly they describe Michael as moving from ambitious to compulsive. By Michael's own account, he's taking upwards of 200 phone calls a day, carrying on 10 conversations at once, buying and selling stocks. All the while, he's working harder than ever. But some colleagues say he doesn't have the same kind of joy for this work that he used to. And some people think he's not paying close enough attention. They say Michael's confidence has outstripped his capabilities. He also seems to be morphing from scrappy underdog to top dog. Around this time, Michael stops wearing mismatched socks and starts wearing fine tailored suits and French cuffs. He starts commuting to work in a chauffeured limousine and buys a Gulfstream jet. He used to eat lunch with his traders and sales staff using paper plates, but now he demands to be served a catered lunch on fine china. His success seems to have gone to his head, literally. He gets a fancy new toupee. Sachi, please check this out.

[Sachi Cole]

This is a shake and go wiggle that you buy from the beauty supply store.

[Sarah Hagie]

It looks like it's on sideways.

[Sachi Cole]

It looks like a bunch of fake mustaches tied together.

[Sarah Hagie]

That's Michael for you.

[Sachi Cole]

He can't have everything.

[Sarah Hagie]

A couple of months into her work on the book, Connie reads an article by a Washington Post reporter who did get access to Michael. Can you read what Michael reportedly said? Yeah.

[Sachi Cole]

He said the force in this country buying high yield securities has overpowered all regulations. This sounds ominous, but I don't totally understand what he means.

[Sarah Hagie]

Well, Michael is basically saying that his coordinated network of investors is now so big and powerful, they overwhelm any government agency tasked with regulating them. So the way Michael sees it, what he and his associates are doing is effectively above the law. And if Connie has any doubts about Michael's shadiness before, they're almost certainly gone now. And before she knows it, the premise of her book will go from profiling a financial genius to keeping up with the most explosive Wall street scandal since the Great Depression. Just one month after Michael tells investors that he's above the law, his friend Ivan Boesky makes a much more public declaration about the power of finance. He's delivering a speech to the graduating class of Berkeley's business school. Standing in an open air, Greek style amphitheater, surrounded by students in caps and gowns, Ivan takes the stage to tell the class all about how he lifted himself up by his bootstraps. Although he seems to forget about all the help he got from his wealthy father in law. Toward the end of the speech, he strays from his planned remarks. Sachi, can you read what he says?

[Sachi Cole]

Yes. He says, greed is all right, by the way. I want you to know that I think greed is healthy. You can be greedy and still feel good about yourself. I bet he has to say this to himself ten times every night just to try to sleep. It seems like it's working.

[Sarah Hagie]

That sounds like something the craziest person you know tweets. But also Sachi. This is the inspiration for the infamous Gordon Gekko greed is good speech from the movie Wall street, which comes out the following year. Ivan doesn't hang around for the rest of the ceremony or the reception. It might be because Ivan is way too busy to hang out with a bunch of kids who all want his job. But it also might be because Ivan has some heavy shit on his mind, like the fact that he's currently under federal investigation. Just days before giving this speech, federal agents arrested a managing director at Drexel and charged him with running a years long insider trading ring. It's the biggest insider trading action ever brought by the sec. And the feds promise that it's just the beginning. And this is very alarming for Ivan. He's worked with a guy who got arrested for years and he's been doing exactly the kind of insider trading that the SEC says they're now investigating. Ivan spends the next three months on pins and needles until he gets his very own SEC subpoena. And the questions are really specific. So specific that there's only one explanation. The Drexel managing director is working with the feds and has told them all about Ivan's financial crimes. So Ivan panics. He calls his accountant and demands that he destroys evidence of some dirty dealings between himself and Michael. Ivan doesn't tell anyone that the Feds are snooping around, but he acts strange. All summer, he's irritable and moody with staff even more than normal. Instead of carrying on at the Harvard Club Bar, he sits in the sauna alone for hours. Unsurprisingly, he loses a lot of weight. Can you read what he tells one co worker around this time?

[Sachi Cole]

He says, I'm getting too old.

[Sarah Hagie]

I'm tired.

[Sachi Cole]

One day I'm going to drop the keys to this office on your desk or walk out of here and never come back. This is ominous and bleak, and it feels like he means it.

[Sarah Hagie]

Yeah. And in August, Ivan clearly is at his wit's end. So he hires a lawyer and admits he's been part of a massive criminal conspiracy. His lawyers convince him to try for a settlement with the government by offering them an even bigger fish. Michael Milken. Ivan turns himself into the Feds and agrees to flip on all his business associates and friends. And one of the first things they ask him to do is set a meeting with Michael Milken and wear a wire. In just four months, Ivan's gone from Wall street to Goodfellas. Now he'll try his hand at being an undercover agent and take a shot at the king of junk bonds. A month after Ivan starts cooperating with the Feds, he and Michael meet at the Beverly Hills Hotel. When Michael arrives at the suite, Ivan lets him in. They wait as a hotel employee lays out their room service spread. Ivan seems anxious to get down to business because he impatiently shoos the hotel worker out once they're alone. Ivan says he's been served a subpoena from the SEC and they want all of his records. Ivan's worried about their illegal dealings. He's especially concerned about a payment he recently made to Michael for $5.3 million. It was to settle what Ivan owed Michael for a series of shady deals. Ivan was in a hurry and didn't go through their normal process of masking his payments by signing over real estate assets or selling stocks at below market valuations. He just wrote Michael a check. Now Ivan insists that he and Michael get their stories straight. At some point, Michael gets spooked. He tells Ivan, you've got to be careful. Electronic surveillance has gotten very sophisticated. Michael leaves feeling unsettled. He calls Fred in New York and tells him that Ivan's acting weird. He asks Fred to hire someone to watch him. And on a Friday afternoon a few weeks later, Michael's working at his desk as the markets close for the weekend. Suddenly, a trader reading the ticker tape shouts, oh, my God. The SEC has just announced that Ivan's been charged with insider trading and has reached a deal with them. He's paying a $100 million fine, the largest fee in SEC history, and is cooperating with an ongoing investigation. Michael doesn't show any outward signs of panic, but inside, he must be freaking the fuck out. Then he gets a call from Fred. They've just gotten subpoenas from the Department of Justice. That means another criminal investigation is underway. Uh, yeah.

[Sachi Cole]

Game over.

[Sarah Hagie]

Game over.

[Sachi Cole]

Their paranoia was deserved. The fun times are over.

[Sarah Hagie]

Brutal. Michael does start to cover his ass by getting rid of evidence over the weekend. He calls one of his traders back into the office. He takes him to the bathroom and turns the water on. Leaning over the sink, he lies and tells the traitor that there are no subpoenas and says, whatever you need to do, do it. Michael's been the big boss for more than a decade now, but he's about to learn that when everyone has to save their own ass, there will be no honor among these thieves. When Fred hears about Ivan's deal with the sec, he's probably shocked. He knows Michael has had dealings with Ivan, but he doesn't believe his star employee could have been a part of anything illegal. Michael's one of the richest men in America, and Drexel has given him everything he's asked for. And Michael insists to Fred over and over again that he's done everything above board. But not everyone shares Fred's confidence. The Wall Street Journal starts publishing details of the SEC investigation and names Drexel as a target. They also make public that Drexel is being investigated by a federal grand jury. In response, The Dow drops 43 points, the fourth largest single day drop in history. Desperate to save its crumbling reputation, Drexel starts running a PR campaign about how actually junk bonds are good. It's called Junk Bonds Keep America Fit. And the print and TV ads echo Michael's message that Drexel is democratizing capital. Fred even joins other Drexel employees in a music video, a spoof of Billy Ocean's when the Going Gets Tough, the tough get going.

[Sachi Cole]

I have such a niche interest in the weird things companies do when they're falling apart. This sounds exactly right.

[Sarah Hagie]

Yeah, it's like this last grasp at their influence. They're like, you know what? Music will unite people and you're like, no, shut up. Everyone hates you.

[Sachi Cole]

It's so defensive.

[Sarah Hagie]

Also, Michael continues to maintain that he's done nothing wrong. So Fred and Drexel also work to rehab Michael's reputation. Drexel starts referring to him in the press as a national treasure. Michael starts spending a ton of time talking about solving the Latin American debt crisis. He also starts the National Educator Awards, where winning teachers get $25,000 apiece. In March 1988, more than a year after the world learned about his deal with the feds, Ivan reports to prison. A couple weeks later, Fred flies to LA for the annual Predators Ball, where Michael lectures everyone about inspiring workers and solving Mexico's economy. But Fred isn't thinking about social issues. He's panicking about Connie's upcoming book titled the Predator's Ball. Connie agreed to let Fred review some parts of the book before publication so he could respond to any factual errors. And as Fred reads the manuscript, he kicks himself for letting her have so much access instead of the victory lap he was hoping for. The book is an indictment of Michael Drexel and the entire junk bond frenzy. So Fred and Drexel go on the offense against her book. They contact hundreds of reviewers claiming the book is riddled with errors. They're hoping to destroy the book's credibility. But the supposed errors were trivial at best. Plus, as you and I both know, Saatchi reviewers are not fact checkers. They don't seem to care. It doesn't work, and the book comes out in June 1988. Three months later, Fred develops a lingering cough. He still believes Michael is innocent, but years of brewing legal issues and fighting to keep Drexel solvent is taking its toll. This is when the SEC finally files its lawsuit against Drexel and Michael for fraud, racketeering, insider trading, manipulation of stock prices, and inaccurate record keeping, among other charges. And these headlines propel Kanney's book onto the bestseller list.

[Sachi Cole]

All I ever want in these stories is for a woman who is a journalist to succeed beyond everybody else. That's all I ever want.

[Sarah Hagie]

It's also so funny that they're trying so hard to make it so that her book wasn't seen by doing things that would only intrigue anyone.

[Sachi Cole]

Yeah.

[Sarah Hagie]

Two months later, on a rainy night in November, Fred is getting ready to go to a black tie dinner at a hotel in Times Square Square when Drexel's head lawyer calls. He tells Fred that he needs to see him right away. So Fred picks the lawyer up in a cab, and they ride uptown together. The lawyer breaks the news. After reviewing trading records, he's come to the conclusion that the SEC is right. Michael's office has been up to some shady shit. There's even a taped conversation where one of Michael's underlings seems to acknowledge that Drexel was steeped in illicit dealings. In the conversation, the underling called it, quote, the world of sleaze. Fred is finally convinced when they arrive in Midtown. He steps out of the car into the pouring rain. His faith in Michael has been shattered, and now he knows what he needs to do to protect Drexel and its 10,000 employees. Throw Michael under the bus.

[Sachi Cole]

I don't think that's a bad instinct.

[Sarah Hagie]

Right, it's not a bad instinct, but it is kind of shocking from the guy who basically made Michael, turned a blind eye to weird stuff and profited immensely himself.

[Sachi Cole]

I guess it's just a testament to how selfish these people really are. It doesn't matter if you're the protege, if you built the thing, if they loved you once, it doesn't matter. Everybody is out for themselves, especially in these industries.

[Sarah Hagie]

It's just like podcasting.

[Sachi Cole]

Yeah, I would slit your throat in a heartbeat.

[Sarah Hagie]

I would do the same, too.

[Sachi Cole]

I would do it even if I didn't.

[Sarah Hagie]

Okay, now you just want to kill me for no reason. All right. About a month later, in January 1989, Drexel reaches a deal with the U.S. attorney's office. They plead guilty to six felony counts and agree to a $650 million fine to settle criminal charges in the largest securities fraud case of all time. As part of the deal, Drexel still needs to settle civil charges filed by the SEC. Three months later, the Justice Department charges Michael with 98 counts of racketeering, securities fraud, insider trading, mail fraud, and other crimes. In the summer of 1989, President George H.W. bush hammers the final nail in Michael's coffin. He signs legislation requiring savings and loans to sell their junk Bond Holdings. By 1994, the junk market collapses. Fred once saw his partnership with Michael as a way to upend the financial system by making it more equal and getting rich in the process. Blinded by his ambitions, now, Fred can't separate himself from Michael's fate. With a recession rocking the country and a trial pending, Michael becomes a face of an era defined by greed. But like a true guru, Michael will pivot away from blame and find a new spin to keep exerting his influence.

[Commercial/Ad Voice]

Okay, Carrie, you ready? Quick, quick, quick. List three gifts you'd never give A cowboy.

[Sachi Cole]

Lacy bobby socks. A Diamond bracelet and a gift certificate to Sephora.

[Commercial/Ad Voice]

Oh, my God. That's outrageous. Carrie. Oh, wait. We're recording a commercial right now. We gotta tell them why we're doing this.

[Sarah Hagie]

Oh, yeah. Sorry, pod listeners.

[Sachi Cole]

Okay, so we're five besties who've been friends for five million years. And we love games, so of course we made our own.

[Commercial/Ad Voice]

It's called Quick, quick, quick. You just pick a card and have your partner give three answers to an outrageous question. It's fast, fun, fantastic, and a bunch of other funny adjectives.

[Sachi Cole]

Anyone can play your mom, your dad, your kitten, your kids, your Auntie Edna, and even your butcher.

[Commercial/Ad Voice]

And you know what's incredible? There are no wrong answers. Just open your brain and say what's in it. Just quickly.

[Sachi Cole]

And you're not going to believe this. Well, you might once you start playing. It's as much fun to watch as.

[Sarah Hagie]

It is to play.

[Sachi Cole]

Seriously.

[Commercial/Ad Voice]

So get up and go. Grab your copy now at Target and Amazon. Quick, quick, quick.

[Sarah Hagie]

It's the fastest way to have fun.

[Commercial/Ad Voice]

In the fall of 1620, a battered merchant ship called the Mayflower set sail across the Atlantic. It carried 102 men, women, and children, risking it all to start again in the new world. Hi, I'm Lindsey Graham, the host of American Historytellers. Every week, we take you through the moments that shaped America. And in our latest season, we explore the untold story of the Pilgrims, one that goes far beyond the familiar tale of the first Thanksgiving. After landing at Cape Cod, the Pilgrims forged an unlikely alliance with the Wampanoag people, who helped the Pilgrims survive the most brutal winter they'd ever known, laying the foundation for a powerful national mission. But behind that story lies another one of conflict, betrayal, and brutal violence against the very people who helped the Pilgrim survive. Follow American Historytellers on the Wondery app or wherever you get your podcasts. You can binge all episodes of American Historyteller's the Mayflower early and ad free right now on Wondery.

[Sarah Hagie]

I feel like a legend. In February 1990, more than a year after Drexel settled with the government, the firm declares bankruptcy. Michael resigned from the firm after the settlement, so he can only watch from afar as the company collapses. Michael has been fighting his charges fiercely, up until the final minute. Michael's wife, his brother, and even his mom urge him not to plead guilty. But as time goes on, more and more of his associates take deals and turn on him. In April 1990, Michael pleads guilty to six securities and reporting violations. As part of this deal, he owes $600 million in fines. Later that month, Michael pulls up to a Manhattan courthouse in a limousine. He walks in the front door looking pale and underweight, his eyes even more stuff sunken in than usual. A huge crowd of press, TV crews and onlookers are gathered on the courtroom steps. Michael stands before the judge and attempts to read his confession aloud. He chokes up as he says, quote, I realize that by my acts I have hurt those who are closest to me. I am truly sorry. Then Michael trails off and falls into his lawyer's arms, sobbing.

[Sachi Cole]

I want to feel sorry for him. It's hard to, because I'm sure he knew he was doing something wrong.

[Sarah Hagie]

Yeah, you know, I actually don't think you need to feel sorry for him at all.

[Sachi Cole]

Yeah, I guess it's more like this is designed to get me to feel sorry for him, and it's maybe not working.

[Sarah Hagie]

Over the summer, a recession grips the country, and the swoon time of the 80s is officially over. Public sentiment turns against Michael in a big way. In November, Michael returns to the courtroom for sentencing. The prosecution reiterates that his crimes were marked by greed, arrogance, and betrayal. All part of a master scheme to acquire power and accumulate wealth. Michael cries again, but the judge isn't interested. In a stunning move, she sentences him to 10 years in prison. Michael is also banned from trading securities for the rest of his life. Dazed, Michael struggles to understand what just happened. His family ushers him into a back room. He asks, how much did I get? Two years. His lawyers have to explain it all over again. Michael is shocked, and he and Laurie go into a small witness waiting room. We don't know exactly what they say to one another, but first Laurie and then Michael scream. And when a lawyer bursts into the room, he finds Michael collapsed in a chair, hyperventilating.

[Sachi Cole]

This guy's kinda. He's kind of pitiful when he gets in trouble, huh?

[Sarah Hagie]

Often I sense that scammers imagine the moment where they're gonna get caught and that they kind of know something's coming. But he just seems so shocked in a way that makes no sense to me.

[Sachi Cole]

Yeah.

[Sarah Hagie]

In March 1991, Michael reports to a federal minimum security prison in Pleasanton, California. He works 37 hours A in maintenance and construction. The prison doesn't allow for hairpieces, so Michael has to resort to wearing a baseball hat. But don't worry, he isn't learning a single thing from this entire experience. Michael hires Alan Dershowitz to try and get his sentence reduced. Allen claims Michael is the victim of antisemitism. And says he was never motivated by money. Michael tells friends and family that he no longer thinks he did anything wrong.

[Sachi Cole]

And.

[Sarah Hagie]

And he regrets pleading guilty.

[Sachi Cole]

Of course, Alan Dershowitz makes an appearance here that feels right.

[Sarah Hagie]

I mean, where else would he be? Well, Michael's sentence is actually shortened after he cooperates with prosecutors. And after serving less than two years, Michael is freed. He decides not to bother with the toupee anymore. And don't worry, he's still insanely rich. Like he is still a billionaire. One month after he gets out of prison, Michael announces that he's been diagnosed with prostate cancer. And he is about to weaponize this diagnosis to launder his reputation and launch one hell of a second act. Just nine months after he's diagnosed, Michael is in Washington, D.C. he's presiding over a dinner for his new prostate cancer fundraising group. More than 100 guests welcome him with open arms, including House Speaker Tom Foley, Senator Dianne Feinstein, and Quincy Jones. It hasn't even been a year since Michael was in prison, but he's cast himself in a new role, cancer victim and philanthropist. And it is working beyond his wildest dreams. Can you read what former Democratic Congressman Tony Coelho said about him at the dinner?

[Sachi Cole]

Yeah, he said, quote, the symbolism is interesting. Here is one of the most successful men in the history of American finance who has ended up with cancer. What that says is, no matter what your success, financially or otherwise, no money, no power, can prevent a deadly disease from attacking you. Yeah, I mean, I don't know. Is that profound?

[Sarah Hagie]

It's not.

[Sachi Cole]

Everybody gets sick and dies. Yeah, no shit.

[Sarah Hagie]

Also, this insane washing him clean of his crimes. It's like, you know, he's so successful and he ended up with cancer. Yeah. I mean, listen, we can go on and on about how this will drive us crazy and we will end up pulling our hair out. Okay, yeah, you're right. Michael tells people he's working with Michael Jackson to start an educational cable channel. He's also lecturing business students and, of course, writing his autobiography. But obviously, this isn't all he's up to. Two years later, Michael is in remission, and he's back to his old puppeteer routine. He's working with Rupert Murdoch and the chairman of the communications firm mci, helping the two make a massive business deal. Michael even has one of his associates drive the MCI chairman to Rupert's offices and stay there until the two hammer out an agreement. MCI agrees to invest as much as $2 billion in News Corp. And News Corp. Pays Michael $27 million in quote, unquote consulting fees. Now, you might be asking, doesn't this violate Michael's ban on trading securities for life? The SEC wondered that too, so it opened an investigation. They find that from 1993 to 1996, Michael was involved in tons of major transactions or proposed transactions, in that he got paid around $92 million. In February 1998, Michael agrees to pay the SEC a $47 million settlement, and in return, they won't pursue criminal charges for violating his consent decree. But public perception continues sliding in Michael's favor. President Bill Clinton even suggests maybe Michael should be pardoned, which the SEC protests with a strongly worded letter. Michael continues to raise money for cancer research and other medical causes. And in 2020, Donald Trump pardoned Michael. Officially, though, it doesn't lift Michael's lifetime securities trading ban.

[Sachi Cole]

Oh, well, it's nice to hear Trump using a little bit of restraint here and there. Generous but cautious.

[Sarah Hagie]

Yeah, that is what you always say. I'm always saying that while Michael isn't hosting the Predators Ball anymore, instead every year he holds the Milken Institute Global Conference in Beverly Hills. It's supposed to be about tackling the world's most pressing problems with a dash of celebrity and Hollywood. Last year's headliner was Elon Musk. After all of this, Michael has never strayed from what he either believes to be true or is absolutely hell bent on having us believe. As he told Fortune magazine, I have never been motivated by money in my entire life. Sachi. I know Michael Milken was probably not, like, the most vocally evil person we covered, but I do think the damage he's caused makes him one of the worst guys we've ever talked about in so many ways. Like, he claimed to be so hell bent on changing the system, but it actually was just changed to work in his favor. And I do feel like this all created an even shittier financial system. And we're dealing with all the issues of that still today, right?

[Sachi Cole]

Yeah, I guess he, in so many ways, helped create a blueprint for a kind of scam we've talked about over and over and over again.

[Sarah Hagie]

Yeah, he's like the grandfather of scams in many ways.

[Sachi Cole]

Yeah. And a kind of scam that's so complicated and, like, process dense that most people I don't even think would be able to get their heads around it. I mean, I. Despite the fact that you just told me this whole story for the last hour, I still am, like, half sure what he did. I mean, the system, when it works Feels like it's full of shit. So, of course, then when someone takes advantage of it, it's like, well, yeah, it still seems full of shit, I guess.

[Sarah Hagie]

Yeah. I think the huge thing was that he and Fred made it sound like they were creating this opportunity to level the playing field for small businesses. And in that regard, people found it to be like, oh, now we can say we're doing something that is good and changing things up. But it had almost nothing to do with that. Like, they just found an area to exploit and milk and milked it.

[Sachi Cole]

Mm. What do you make of all of his weeping and his flailing, his throwing himself into his lawyer's arms? A lot of dramatics.

[Sarah Hagie]

I think he has always been in control and has always felt very unstoppable and that anything he wanted could happen. And I think this is the first time his life had been derailed in any way and it had nothing to do with anything except for obviously him feeling sorry for himself. This guy has no soul at all. Yeah. His actions were so quietly sinister that most people don't even know they are to pin the blame on someone like him. Yeah.

[Sachi Cole]

It's scary to feel like somebody is.

[Sarah Hagie]

Writing rules you don't understand for a.

[Sachi Cole]

Game that you barely knew you were.

[Sarah Hagie]

Playing but that you are playing no matter what.

[Sachi Cole]

Why do you think MGM keeps coming up so much in our episodes? Like, I feel like the ownership of that company, we're always playing in those sandboxes.

[Sarah Hagie]

I think MGM is the perfect example also of a brand that represents so much glamour and, like, it's, like, so shiny. And I think that everyone wants to be the person who's like, I'm gonna fix mgm. It's going to be me. But it's really just a name. It's like a shell of a company that kind of everyone's trying to hold onto. Yeah, it's just fake legacy to hearken back to the olden days. You know what I mean?

[Sachi Cole]

We were once so innocent.

[Sarah Hagie]

Yeah.

[Sachi Cole]

Loving Scamflancers get exclusive episodes and early access to new ones. All ad free on Wondry. Join now in the Wondry app, Apple Podcasts, or Spotify. Before you go, help us out by taking a quick [e-mail] survey.

[Sarah Hagie]

This is Michael Milken. When Junk was King. I'm Sarah Hagke.

[Sachi Cole]

And I'm Sachi Kol. If you have a tip for us on a story that you think we should cover, please email [e-mail] we use many sources in our research.

[Sarah Hagie]

A few that were particularly helpful were.

[Sachi Cole]

Connie Brooks book the Predator's Ball, James B. Stewart's reporting for the Wall Street Journal and his book Den of Thieves. The Junk Bond King's Next Move Mike Milken's revolutionized Wall Street. Now, in the face of insider trading investigations, the Beverly Hills capitalist explains his next assault on the world of high finance. By Edward J. Epstein for the LA.

[Sarah Hagie]

Times Our senior producer Sarah Enny wrote this episode. Additional writing by us Sachi Kol and Sarah Haggie. Eric Thurm is our story editor. Fact checking by Lexi Piri Sound design by James Morgan. Additional audio assistance provided by Augustine Lim. Our music supervisor is Scott Velasquez for Frisson Sync. Our managing producer is Desi Blaylock. Our senior managing producer is Callum Clews. Jeanine Cornello and Stephanie Jens are our development producers. Our associate producer is Charlotte Miller. Our producer is Julie Magruder. Our senior producer is Ginny Blume. Our executive producers are Jenny Lauer, Beckman, Marshall Louie and Erin O' Flaherty for Wondery.

[Commercial/Ad Voice]

Nearly 30 years ago, a vicious serial killer murdered five women in and around the city of Montgomery in Belgium, not far from where I'm standing right now. He taunted authorities placing their dismembered body parts in locations designed to terrorize the population. There was a macabre and mysterious discovery of body parts apparently dismembered with a saw, according to investigators. His identity remains unknown, but his name still sparks fear. The butcher of the 10 trash bags.

[Sarah Hagie]

Have been discovered so far.

[Commercial/Ad Voice]

Investigators believe it is the work of a serial killer. For the moment, none of the victims have been identified. We've unearthed new evidence, new witnesses and new suspects. This is le Monstre Season 2, the Butcher of Moss. Listen for free on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.