Capital Allocators – Inside the Institutional Investment Industry

Richard Sandler – The Prosecution of Michael Milken (EP.372)

Mar 4, 2024

Richard Sandler, Mike Milken's attorney since 1983 and author of 'Witness to a Prosecution,' delves into the misconceptions surrounding Milken's infamous plea deal. He challenges the belief that Milken engaged in insider trading, instead revealing the complexities behind the prosecution led by Rudy Giuliani. Sandler sheds light on the harsh realities of government investigations, the evolution of Milken's legacy in finance, and the implications of the RICO Act, all while advocating for a more nuanced understanding of financial misconduct and justice.

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ANECDOTE

Mike Milken's Plea

Mike Milken pleaded guilty to six security law violations 33 years ago.
He went to jail for 2 years and received a lifetime ban from the securities industry.

ANECDOTE

Childhood Friendship

Richard Sandler and Lowell Milken have been close friends since first grade.
They even attended college together at Berkeley, strengthening their bond.

ANECDOTE

Student Leadership

Mike Milken was known for his outgoing and competitive nature as a student.
He was a leader, head cheerleader, and prom king, demonstrating his popularity.

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A long time ago, 33 years to be exact, Mike Milken pled guilty to 6 counts of violations of securities laws, went to jail for 2 years, and received a lifetime ban from the securities industry. He was at the time the most successful and powerful man on Wall Street and remains one of the smartest and most successful backers of talent in finance, cancer research and education.

Most of us have formed beliefs about Mike based on accounts in the media or books written like Den of Thieves. We might think Mike was guilty of insider trading, for example.

The way we form beliefs is problematic and rooted in survival from a time long past. We hear something and almost always immediately believe it is true. Danny Kahneman calls that System 1 thinking.

Here’s one example. We think Mike was guilty of insider trading. In fact, he was not. His plea of guilty did not touch insider trading.

And another, the Attorney who aggressively pursued Mike to bring him down and presumably catapult his own political ambitions was none other than Rudy Giuliani, himself indicted, arrested, and disbarred 30 years later.

Last week, Mike discussed how he emphasizes research and facts in his work. It is System 2 thinking - that requires us to think on our own without being infected by the beliefs of others. So what really happened to cause us to have such negative views about a man who has done so much for the world?

My guest on today’s show tells a very different story based on facts from being in the room where it all happened.

Richard Sandler has been Mike Milken’s personal attorney since 1983, having joined Drexel three years before the U.S. Attorney first subpoenaed Mike. He wrote a book last year entitled Witness to a Prosecution – the Myth of Michael Milken that describes his account of what happened based on the facts.

Our conversation covers Richard’s perspective on the history, motivations, and proceedings that led to both Mike’s imprisonment and the public perception of him that formed as a result.

I encourage you to set aside any preconceived notions you have about Mike Milken in listening to this conversation.

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