[LibWhacker]

How so? Just a couple of points will be fine. I barely remember the case myself.

[Alberta's Child]

He was basically engaging in insider trading, but could not be prosecuted directly for it because laws related to insider trading didn’t apply to corporate bonds at the time (only stocks). So he traded bonds and made a fortune using inside information, which would have been OK (legally) at the time but he was working with other parties to have them execute stock trades on the same companies he was buying and selling through his bond business.

His real legal problem was the accusation that he was working with others to hide the nature of many of these transactions by using “cutout” transactions — like taking the proceeds of an illegal sale transaction and reporting it as a “consulting fee” to hide the real source of the revenue from SEC regulators.

[Fido969]

How so? Just a couple of points will be fine.

Milken got companies to issue risky "junk" bonds, then repackaged and sold them, hiding the riskiness of the final securities, and so was selling them for more than they were worth. Eventually, payments couldn't be made on the loans, and investors were scr#wed.