In Written Testimony, Drexel Executive Supports Milken on Caesars Charge
NEW YORK (AP) _ A former top Drexel Burnham Lambert Inc. official said in court papers filed Friday that Michael Milken was unaware of a 1983 agreement to advise a client central to a government charge of insider trading.
John Kissick, ex-head of Drexel’s West Coast corporate finance department, testified for Milken’s defense in a bid to exonerate the former junk-bond financier from insider trading in Caesars World Inc. bonds.
The government, in a pre-sentencing hearing that ended Thursday, offered testimony implying Milken knew Drexel was advising Caesars on a debt exchange when he ordered his traders to purchase bonds of the casino company.
Sentencing of Milken on his guilty plea to six trading-related felony counts is not expected until after next week, a clerk for U.S. District Judge Kimba Wood said Friday.
Milken attended a meeting with Caesars and Drexel executives on June 29, 1983, at which the government claims Milken was a ″leading proponent″ of a debt-for-equity restructuring for Caesars.
Former Drexel trader James Dahl testified at the hearing that Milken at some point ordered him and other traders to purchase Caesars bonds from customers. But he couldn’t when the directive was given.
Drexel on July 15 announced it was advising Caesars on a debt restructuring, which sent the bonds soaring in value. The government claims Milken ordered the purchases because he had inside knowledge of Drexel’s plans to manage the debt-for-equity restructuring.
Prosecutors also claim Milken purchased $2.65 million worth of Caesars bonds on July 1 for a personal account and sold in late July at a $553,000 profit.
Kissick testified the June 29 meeting had no formal agenda and several proposals for helping the company were discussed.
″I cannot recall who proposed what, but I have attended over 100 meetings like this with Michael Milken and it is not Mr. Milken’s style to stress any one option,″ he said.
Kissick said no decision was made at the meeting about Caesars, or even whether Drexel would be hired to advise the company.
Kissick said that Caesars on July 1 told him it was interested in exchanging debt for equity. He said he assigned an executive in Drexel’s San Francisco office to work with Caesars.
″To the best of my knowledge, Michael Milken had no involvement with our relationship with Caesars″ between June 29 and July 15, Kissick testified.
Supporting testimony given Thursday, Kissick said Milken was out of the country on vacation for much of the period.
Milken faces up to 28 years in prison. The eight-day pre-sentencing hearing was on alleged illegal trading beyong the six counts he has admitted the government said shows Milken deserves a lengthy prison term.