Gabelli School of Business O’Shea Center for Credit Analysis and Investment Hosts Virtual Fireside Chat with Richard Sandler, Michael Milken’s Personal Attorney
Featured Events | Dec 21, 2023 | Gabelli School of Business
Adjunct Professor Michael Gatto Moderated the Talk, Which Focused on Sandler’s New Book That Challenges Assumptions About Milken’s Guilt and Provides New Insights Into his Prosecution
On December 5, the Gabelli School of Business O’Shea Center for Credit Analysis and Investment hosted a virtual fireside chat with Richard Sandler, J.D., who is financier Michael Milken’s personal attorney and childhood friend, as well as the executive vice president, secretary and a trustee of the Milken Family Foundation. The discussion was moderated by Adjunct Professor, Michael Gatto, partner and head of private side businesses at Silver Point Capital.
Bob O’Shea, the O’Shea Center’s namesake, introduced the event, emphasizing the Center’s mission to connect academia and the world of finance. O’Shea discussed how the Center’s cutting-edge academic curriculum, combined with Michael Gatto’s soon-to-be released book, “The Credit Investor’s Handbook,” aims to boost students’ competitiveness for top-tier jobs in the industry. He also emphasized the Center’s commitment to incorporate Fordham University’s mantra of service to others. “Michael and I believe with success comes the responsibility to help others,” he noted. “We are integrating a ‘giving back’ program into the O’Shea Center.” This past fall, Gatto’s class partnered with the wonderful charity buildOn to identify a community in Mali where over half the population over the age of 15 are illiterate, and most girls are not afforded any education. The O’Shea Center has funded the building of three schools in Mali; and each school has pledged that at least 50% of the students will be female.
O’Shea then kicked the fireside chat over to Gatto, who led a riveting discussion with Richard Sandler on his new book, Witness to the Prosecution: The Truth About Mike Milken. Sandler gave an insider’s perspective on one of the most notorious Wall Street criminal cases, highlighting details about the 1986 SEC and the U.S. Attorney for Southern District of New York’s investigation into Milken, Drexel Burnham Lambert, and its High Yield and Convertible Bond department, which Milken created and headed. In that role, Sandler noted, Milken democratized access to capital for the 99% of companies that could not previously access the public markets and created a financial revolution that continues to this day.
When the government began to investigate Milken, Sandler made the decision to represent him as his personal lawyer, while also overseeing the attorneys who would be responsible for his defense. Milken was sentenced to 10 years in prison and fined $600 million after pleading guilty to six regulatory violations. He ultimately served two years, but the full story behind his indictment, the intense media hype around the case, and what Sandler characterized as a “prosecutorial witch hunt,” was not told until the release of Sandler’s book. “The purpose of writing the book,” Sandler noted, “was to document what happened during the case by someone who was there when it happened, not only from what I saw and heard, but based on the court documents. This book is based upon fact.”
During the discussion and in the book, Sandler humanized Milken, and talked about growing up with him and his brother Lowell, who also was prosecuted. He focused on the personal bond they developed during high school and college, and how their careers developed in tandem after Milken earned an M.B.A. and Sandler graduated from law school. They began a professional relationship when Sandler set up a consultancy group in 1984, which exclusively advised members of the High Yield department Milken was running.
“I was at the pulse of one of the most exciting times in the financial services industry,” Sandler noted, emphasizing Milken’s brilliant approach to high yield finance and how his intelligence and ability to influence others brought about his success and led to the creation of an industry that gave new businesses and investors the chance to create value by financing companies that were too small to access the markets. “All of a sudden, an entire industry was developed, and traditional Wall Street was left out,” he explained. “They found that their business was being eaten into.”
Sandler attributes the cause and the source of the Milken investigation to Ivan Boesky, an American investment banker who was accused and found guilty of insider trading. “By the end of the day Boesky was indicted,” Sandler noted, “we had federal marshals serving subpoenas from the Southern District of New York.” He believes that Boesky’s plea deal with the government required Boesky (in order to reduce his sentence) to provide information on other individuals, including Milken, leading to Milken’s prosecution. Because the case was so high profile, according to Sandler, it became imperative for the prosecutors to succeed at all costs.
Sandler went on to walk the virtual audience through the history of the role of government prosecutors, describing how power is wielded before an indictment is issued. He talked about how immunity is used to induce witnesses to talk against others, the complexity of white-collar crime, and how this impacted Milken’s ability to defend himself against government charges. Sandler made his points from the perspective of being not only Milken’s personal attorney, but also being a close friend of the family, who saw first-hand the toll the case took on those who Milken loved and wanted to protect.
“The whole period was painful,” Sandler recalls. The public was reading about Milken’s case from almost immediately after the subpoenas were issued in November 1986 to its conclusion. “Others were pleading guilty and getting immunity. Because of all the publicity around his case, if he was found guilty, he was facing many years in prison,” Sandler asserted.
While Milken ultimately did plead guilty, Sandler corrected the widely held assumption that he did so for insider trading, which he refused to do. Instead, Sandler and the criminal defense team were able to structure a deal that allowed Milken to plead guilty, without admitting guilt to any of the insider trading or racketeering charges waged against him. Milken was released after serving just two years, and he was pardoned in 2020 by then- President Donald Trump.
At the discussion’s conclusion, Sandler offered insight into Milken’s positive approach to overcoming life’s challenges—including a prostate cancer diagnosis. He focused on Milken’s deep commitment to building something meaningful and to giving back to society. “Every step of the way, he got up, dusted himself off, and decided to do something productive that day. Even at the worst possible time, the people he worked with never lost respect for him.”