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Speaker 1: Michael Milkin, once nicknamed the Junk Bond King, was one

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Speaker 1: of the most powerful figures in Wall Street history to

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Speaker 1: go to prison. Milkin was indicted for racketeering and securities

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Speaker 1: fraud in in an insider trading investigation, but he pleaded

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Speaker 1: guilty to securities fraud and served only twenty two months

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Speaker 1: out of a ten year prison sentence. Milkin is now

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Speaker 1: known for his philanthropic efforts after prison, including an annual

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Speaker 1: conference of the Milken Institute, where Treasury Secretary Steve Manutian

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Speaker 1: spoke earlier this year. This week, Wealth Management executive David

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Speaker 1: Bonson sent a letter to President Trump asking him to

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Speaker 1: pardon Milkin. Bonson writes that Milkin did not commit a

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Speaker 1: crime and that he was prosecuted only because our society

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Speaker 1: went through a period of class envy run amuck. Here's

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Speaker 1: Bonson making that case on Bloomberg TV. I don't wieve

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Speaker 1: anybody would say that he broke the law who has

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Speaker 1: actually studied the subject thoroughly that could easily quantify what

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Speaker 1: laws he broke. I don't really believe that the judge

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Speaker 1: even knew what laws he exactly broke. Milkin ended up

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Speaker 1: pleading guilty when they extorted, leveraged his brother's arrest against

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Speaker 1: him when he knew that they were going to go

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Speaker 1: after his brother. That's where Michael Milkin ended up leading guilty.

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Speaker 1: Our guests our Peter Henning, a professor at Wayne State

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Speaker 1: University Law School, and Robert Hockett, professor at Cornell University

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Speaker 1: Law School. Peter, what's unusual is that Bonson's three page

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Speaker 1: letter is not about Milken's philanthropy, but an argument that

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Speaker 1: his quote alleged crime is to this day a total mystery.

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Speaker 1: You know the case, you know the law was there

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Speaker 1: a crime? Well, I should disclose that I was at

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Speaker 1: the SEC in the late nineteen eighties and the Enforcement Division,

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Speaker 1: although I didn't work on the milk In case. Um

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Speaker 1: was their crime? Well, you know he did plead guilty.

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Speaker 1: Now the claim that he just did that to keep

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Speaker 1: his brother from being charged. Um. You usually don't see

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Speaker 1: a request for a pardon based on innocence, although that

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Speaker 1: certainly can happen, but typically in the federal system that

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Speaker 1: when there is a pardon, it's given to a defendant

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Speaker 1: who acknowledges his or her guilt and uh that there

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Speaker 1: was a case, certainly against Drexel Burnham and Mr Milkin

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Speaker 1: based on certain disclosures and certain trading practices, would they

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Speaker 1: have gotten a conviction at trial? You know, that's a

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Speaker 1: very good question. Um. And also the case was prosecuted

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Speaker 1: at the time by an ally of Mr Trump's, Rudy

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Speaker 1: Giuliani was the United States Attorney for at least part

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Speaker 1: of that period, So it would be interesting to see

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Speaker 1: how this plays out, Bob, what's your take on that.

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Speaker 1: So when Michael Milkin pleaded, he didn't plead to insider trading,

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Speaker 1: didn't plead to racketeering, uh, pleaded instead to just securities fraud. UH.

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Speaker 1: And then because he cooperated with with investigators, had a

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Speaker 1: sentence reduced to about two years. Um, what's your take

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Speaker 1: on whether what he did was actually against the law? Well,

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Speaker 1: it's I mean, I don't even know where to begin

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Speaker 1: on this. I mean, as soon as I read the letter,

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Speaker 1: I don't I don't know if I was spitting up

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Speaker 1: my coffee or throwing up it was the most ridiculous

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Speaker 1: thing I've ever read. The unsis first he doesn't want

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Speaker 1: to relitigate the merits of the case, but then immediately afterwards,

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Speaker 1: in the following sentence, says, but he was innocent, which

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Speaker 1: is of course the speaking to the merits. He then

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Speaker 1: says it was all about class, and they run a muck.

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Speaker 1: I don't think that Rudy Giuliani, the chief prosecutor, had

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Speaker 1: class envy. I don't think he was a sort of

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Speaker 1: champion of the Bernie Sanders wing of the Democratic Party. Um,

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Speaker 1: you know, if he hasn't if he if he thinks that. Uh.

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Speaker 1: He also of course says that the judge doesn't even

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Speaker 1: know what the charges were or what the law was,

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Speaker 1: which is preposters. There's no basis to say that, And

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Speaker 1: it's hard to imagine anything more insulting to the American

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Speaker 1: judiciary than to say, you know, for somebody to say

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Speaker 1: something like that, this guy is not a lawyer. He

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Speaker 1: doesn't know what securities laws were, He doesn't know what

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Speaker 1: the actual charges were or how one goes about substantially

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Speaker 1: getting those. And the fact that Mr Milken plea bargained

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Speaker 1: himself into a lower sense thance that happens all the

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Speaker 1: time in the criminal process. That doesn't say anything about

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Speaker 1: the merits of the original case that was brought. Now,

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Speaker 1: it's true that Juliani himself now favors of pardon. But

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Speaker 1: the significant thing here is that Juliani favors of pardon

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Speaker 1: on the basis of the philanthropy, not on the basis

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Speaker 1: that not on any claim that well there wasn't really

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Speaker 1: there weren't any legal marriage to the case, because again,

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Speaker 1: those legal marriage were merriats. Giuliani himself decided we're worth

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Speaker 1: pursuing back in the nineties. So the letter is just

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Speaker 1: it's just sort of almost like a kind of pressure

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Speaker 1: chest full of nonsense and rubbish, and it's it's hard

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Speaker 1: to imagine what could possibly motivated other than being emboldened

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Speaker 1: by the craziness of the R Pio parton. I guess

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Speaker 1: that some people are thinking, well, a Hill pardon our Pio, Hill,

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Speaker 1: pardon anybody, maybe even Charles Manson next. So you know,

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Speaker 1: it's it's it's just this letter is actually just it's comical.

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Speaker 1: It's it's it's it almost doesn't even uh, it's almost

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Speaker 1: not even worth dignifying with a serious engagement. But I

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Speaker 1: hate it when you do say what you really mean.

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Speaker 1: I just want to stop for one moment to let

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Speaker 1: this breaking news in a report says that President Trump

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Speaker 1: is expected to end an Obama era program that protected

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Speaker 1: children from deportation. That will probably allow those immigrants known

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Speaker 1: as dreamers to stay in the US until work permits expire.

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Speaker 1: That's according to McClatchy reports citing unidentified people familiar with

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Speaker 1: the situation will have more on that. Peter to go

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Speaker 1: back to this letter. There there's a picture painted of

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Speaker 1: this ugly period. He calls it of egregious prosecutorial abuses

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Speaker 1: and prosecutions devoid of due process, and says the pardon

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Speaker 1: is needed as a mayo culpa and to purge that

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Speaker 1: from American consciousness. What is he just what is he describing? There?

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Speaker 1: Is there any kind of basis for that? Well, it

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Speaker 1: certainly maybe a Mr Bonson's memory that the nineteen eighties

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Speaker 1: were an assault um on the wealthy or something like that.

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Speaker 1: But frankly, most Americans, certainly the younger generation, whether they're

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Speaker 1: millennials or Generation X or Y or whatever, UH, don't

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Speaker 1: have any clue who Michael Milken was. And um, you

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Speaker 1: know that in the nineteen eighties you certainly had some

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Speaker 1: real abuses. You had insider trading, the ivan Bowski type

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Speaker 1: uh trading that went on and his cohort, and you

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Speaker 1: also had some uh securities issues that we're going on

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Speaker 1: with companies not making proper disclosures, accounting frauds and things

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Speaker 1: like that. I guess you could point to almost any

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Speaker 1: decade and say there was an attack on the wealthy.

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Speaker 1: How far does that get you? UM, I'm just not

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Speaker 1: really sure, and that's not really a basis. I'm not

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Speaker 1: sure if there will be any national healing if Michael

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Speaker 1: Milken receives a pardon. Certainly because of his philanthropic endeavors,

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Speaker 1: he might be deserving of it and something that president

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Speaker 1: should consider. But it doesn't seem to be that this

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Speaker 1: would be the vehicle to say, well, let's cure what happened,

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Speaker 1: uh thirty years ago. Um. I don't think people really

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Speaker 1: remember what happened thirty years ago, but Bob only thirty

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Speaker 1: seconds lefter. So. But but the philanthropic stuff that Michael

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Speaker 1: Milkin has done, could that be enough to justify a pardon?

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Speaker 1: I guess I'll put it this way, If there is

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Speaker 1: any case to be made for a pardon, it would

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Speaker 1: be based on that, right, I don't. I think it's

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Speaker 1: ridiculous to think internhould sort of say that there weren't

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Speaker 1: any merits to the case. So there was a donile

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Speaker 1: do process, especially for not a lawyer, and don't even

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Speaker 1: know what the process is. But if there is a

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Speaker 1: basis for a pardon, it would be the philanthropy and

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Speaker 1: there has been a lot of that has to be

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Speaker 1: admitted and for that, that's exactly the reason, of course,

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Speaker 1: that Giuliani wants a pardon. But Giuliani would not say

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Speaker 1: he did not have a case against Milkin. He's just

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Speaker 1: saying that Milkan has sort of redeemed himself. So I

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Speaker 1: would go with Giuliani rather than with this hedge fund

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Speaker 1: man bonds. And if I were to consider it all right,

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Speaker 1: we'll have to leave it there. Thank you. Bob Hockett,

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Speaker 1: professor at Cornell University Law School and Peter Named, professor

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Speaker 1: at Wayne State University Law School. I should mention um

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Speaker 1: President Clinton was very close to pardoning Milken, but then

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Speaker 1: was convinced by secure law enforcement regulators not to do.

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Speaker 1: So that's it for the decision of Bloomberg Law. Will

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Speaker 1: be back tomorrow one pm. Wall Street Time. Coming up

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Speaker 1: next live from the US Open, Carol Master will be

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Speaker 1: here with Bloomberg Markets