Securities Fraud and Sentencing

Securities Fraud and Sentencing
Name
Instructor`s Name
Course Title
Date
Securities Fraud and Sentencing
Michael R. Milken
Securities fraud is the intentional act of deception, concealment; omission of information concerning financial matters for purposes of cheating investors while violating security laws for personal gain (Levi, 2010). Michael R. Milken committed one of the biggest frauds in the world in the 1980`s. He invented the junk bond at Drexel Burnham Lambert, a New York securities house (Daly, 2011). He influenced the buyouts of stable companies and then gutted them to garner personal fortunes leaving the employees and stockholders with ruins. He maximised on the financial problems in the world system to advice small companies to seek large amounts of money through junk bond sales to settle off their debts (Adams, 1993). This resulted in rich traders buying off small firm`s debts, and then using the stock leverage they gained to take over the firms. So many firms died as a result and in 1990, he was charged with several counts of fraud and pleaded guilty to six counts that involved ...