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Milken's Probation Extended--Again

Courts: Postponement is the third this year. SEC needs time to determine if the ex-junk bond king violated terms of his punishment.

July 27, 1996|From Associated Press

NEW YORK — Michael Milken's punishment has been extended for a third time this year.

Next Thursday was to have been the last day of a three-year probation for the ex-junk bond king, the central figure in one of Wall Street's biggest securities fraud scandals.

But a federal judge this week extended Milken's probation by three more months to give the Securities and Exchange Commission additional time to investigate whether Milken's recent business dealings violated the terms of his punishment.

U.S. District Judge Kimba Wood's office on Friday said the judge signed the order after lawyers for Milken and the government agreed to the extension. His probation now is scheduled to expire Oct. 25.

Milken's probation previously was extended in March and in June.

Milken said through a spokesman Friday that he has done nothing improper in his business dealings. "From the very beginning we have maintained that none of Mr. Milken's activities were in any way a violation of the SEC restrictions," said the spokesman, Michael Reese.

William McLucas, the SEC's director of enforcement, declined to comment.

Milken, still one of the nation's richest financiers, pleaded guilty to six counts of securities fraud six years ago in connection with an insider trading scandal that ensnared a number of high-profile, white-collar criminals.

He served two years in prison, paid more than $1 billion in fines and was banished from the securities business for life, which means he is banned from associating with any securities dealer, broker or advisor.

But over the past year, Milken counseled Ted Turner in his negotiations to sell Turner Broadcasting System Inc. to Time Warner Inc. for $7.5 billion.

Reese said that although Milken is to get $50 million for his services, he hasn't received any of the money yet.

In addition, Milken gave advice when MCI Communications Corp. agreed to invest up to $2 billion in Rupert Murdoch's News Corp. last year. Reese would not say how much Milken was earning from that deal or whether he had gotten any money yet.

The terms of the extended probation allow Milken to travel outside his native Los Angeles without permission from his probation officer. He also no longer needs to check in with his officer once a month.

Still, the extension is significant because it theoretically could allow the government to impose additional punishment on Milken or further delay his complete freedom if the SEC investigation determines he has violated the terms of his sentence.

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