Witnesses Fail to Link Milken Directly to Illegal Trading
NEW YORK (AP) _ The government’s first two witnesses against Michael Milken couldn’t directly link the former junk bond financier to scheming with Ivan Boesky to manipulate a stock.
The witnesses took the stand Thursday at a hearing on allegations made by prosecutors in a pre-sentencing memo in which they urge a stiff sentence for Milken.
Milken is not on trial; rather, the former Drexel Burnham Lambert Inc. financier is being given a chance to dispute the allegations before he is sentenced.
Prosecutors have picked three transactions they claim demonstrate that Milken routinely took advantage of clients and rigged the markets for his own gain.
Under questioning Thursday from prosecutors and defense lawyers, former Drexel trader Cary Maultasch and former Boesky trader Michael Davidoff could not link Milken to the alleged 1986 manipulation of Wickes Co. stock.
The government alleges that Milken directed Boesky’s company to buy large blocks of stock in Wickes Cos., a Drexel client, in 1986 to drive up its price.
U.S. District Judge Kimba Wood asked Maultasch whether he had ″any reason to believe that Milken was involved in the decision to get the Boesky organization to buy Wickes stock.″
The witness replied, ″No factual basis.″
Milken, 44, pleaded guilty in April to six conspiracy and fraud charges and agreed to pay $600 million rather than face trial on a 98-count indictment. He could get up to 28 years in prison.
The government is trying to show that Milken manipulated the securities markets for his personal benefit. The defense contends his crimes were cases of going too far to help clients.
″We find no nobility in cheating for a client to earn fees,″ Assistant U.S. Attorney John Carroll said in an opening statement.
Milken attorney Arthur Liman countered, ″When someone has the visibility and celebrity that Michael Milken has, it’s easy to say that everything that ever happened at Drexel was his fault.″
The pre-sentencing hearing resumes Monday and is scheduled to last two weeks.
The other transactions to be aired by the government involve alleged illegal dealings in Caesar’s World Inc. and Storer Communications Inc.