YouSaid · the spoken record

Richard Sandler

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2024-03-04
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2024-03-04
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  1. “Well, I thank you for the opportunity. I think it's important for people to know that everything you read isn't necessarily true and that people are people. And people have feelings. People are complicated. This is a human being.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Nobody explains what Mike does better than Mike. He's very persuasive. He's very knowledgeable. He understands it. He's a great advocate for himself. And here he went to the most important process of his life at that point in time. Because don't forget he got prostate cancer later. But he's going through there. He's going to be sentenced. He's going to be subjected to whatever he's going to be subjected to. And everybody has discussed who he is but him. So do I think it would have made a difference if there was a way to do it? Yeah, I think it would have made a difference.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “I think it would have changed dramatically. I think they would have realized that he doesn't seem to be this person that has been described to me. Maybe he made a mistake somewhere, but maybe we shouldn't be bringing a Rico prosecution here. Maybe this should be an SEC matter. Maybe we shouldn't be dealing with this at all. Let the SEC, they're dealing with it, let them deal with it. One of the things I talk about in the book that I was always sorry about was Mike didn't testify at the FATA go hearing.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “People without there being a downside to the person under investigation by sitting down with the prosecutor. This is all about people. People are complicated, but there are people. And I would like to see prosecutors understand that the people they're going after have lives and they have families. And what if they're wrong?”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “And you go to trial and you get acquitted, you're still lost. There's a famous case, I think the guy's name was Nanabin as Secretary of Labor, he was accused of a crime, went to trial, and was acquitted. And when they asked him afterwards, how do you feel now? His response was, tell me where I go now to get my reputation back. Because people believe the headline. They never know the rest of the story. They just remember, oh, that person was indicted. Must have done something. So if you're under criminal investigation, you have nothing but downside. If you're a prosecutor and you're wrong, you have no downside. All you're trying to do is help your career. I'd like to see the process somehow more balanced. I would love to see a situation where the people could get to know each other.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “First and foremost, that historically there is a record of what really happened by somebody who was there firsthand and knows what had happened. I know for a fact that there are business schools that teach finance that when they talk about this period will recommend a book like identities or something else. I want there to be another resource. I certainly don't have the power to eliminate other resources, but I want there to be really a true historical record. I think Mike deserves it and his family deserves it. He's got children. He's got grandchildren. I think there needs to be an historical record. Number two, I would like to see the process viewed in a way so that there's downside for abusing the process on behalf of prosecutors. So they at least think about what I said earlier. What if I'm wrong? Right now, you go through a criminal process.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Mike's nature is very non confrontational. I saw it growing up, I saw it in the fraternity, biggest mistake would be when somebody said it's your fault and it's not your fault. Stop doing business with them. Rather than say, I'll make it up to you. I'll figure it out later, whatever else. That's a non-confrontational way because someday I will make it up to you. Just figure it out. But I think that really ended up hurting him. It's not a terrible. But to allow this to happen. And then the other thing is what he pointed out to allow others to define you instead of defining yourself, especially today even more than it was 30 years ago, is something that you can pay a price for if circumstances happen as they happen to us. Others wanted to find you negatively and as a person different than who you are.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Tutorial process that we were subjected to still exist. The power of the prosecutor is still there. It can be used for political or other purposes as it has been and probably continue will be. And people should understand how one sided it is. So those are the reasons that I still think it's relevant because I think Mike's still relevant and I think the process certainly is still relevant on what's going on today. So I finally did it. I'm glad I did it.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Ten years before I wrote the book, a friend at Stanford said, I'll do this class with you. And we taught at Stanford Law School, pretty respected law school. And the class was really well received. And it got me all my information, plus the prosecutor came to the class and I transcribed what he had to say and other government and other lawyers came. And I had all the information. And I was going to sit down and start writing the book. And a few more years went by. I taught the class again. COVID happened. I'm sitting at home. I just got done teaching the class. I said, I'm doing it. And I sat down and started writing the book. I think it's still relevant today because Mike is still a public figure today. Obviously people respect what he's done in philanthropy. They have no idea what he accomplished as a financier or what happened to him before. So it just seemed like, you know what? It's not too late. And plus there's a message here.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “An excellent question. It's something I've been thinking about for a long time. And once you don't do it immediately, just all of a sudden has a way of just accelerating. So initially, I wasn't going to do anything because these other books were out there and Mike had just served a sentence or was even serving a sentence at the time. And I felt we were just up against a title wave. I was going to let time pass. And then as time passed and some of the same lies kept getting repeated, he went to jail for insider trading or you went to jail for fraud in the bond market. None of which was true. I said, you know what? I was there. No one's ever written that was there. I'm going to write something myself. So I decided that the best way for me to write is if I could teach a class on the subject, it would cause me to the discipline of gathering all my notes, all the information, and getting it organized. And about”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Remember, the judge who sends Mike, who held the Fatico hearing, wrote a letter to the parole commission on Mike's behalf indicating that she held the Fatico hearing and she did not believe that any further wrongdoing other than what he pled to could be shown, even by a preponderance of the evidence as a result of her fat acquire.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Then he heard from Boski I'm the source for milking. And he said, I chose to believe Boski because he'd already made a deal and he had no reason to lie. Plus Milken first said he was innocent and then he pled, which I found interesting since what Mike pled to isn't what he was indicted for. But that's not how he represented to me when he interviewed me. Plus, I'm mentioned in that book. Now, he said everybody mentioned in the book had an opportunity to be interviewed about what they said about him. He met with me twice, never asked me one question about things he said about me in the book, some of which are not true. So to me, obviously you could say that I'm prejudiced. The book doesn't have a lot of credibility. Clearly, if he talked to Boske and he took Boski side of the story, that's the basis under which he accuses Mike of things that the government never accused him of.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “So we went through the transactions, we found that his theory of the transactions was totally wrong. I showed him why it was wrong. And he published the book and most of what I told him was not in the book. And if it was in the book, it was in the end notes of the book. It was not when he described what he considered the wrongdoing in the transaction. And what I found very interesting about it is in the forward of the book, he talks about how he wrote the book and how many people were interviewed. And he said, everybody mentioned in the book was either interviewed or had a chance to be interviewed about what we said about them. And if there was a discrepancy between two people, I would decide based upon my reporting which one was telling the truth. And I would put the other side in the end notes of the book. He said the biggest discrepancy I found was between Boski and Milken. Now, if there was a discrepancy between Boski and Milken, if he talked”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “That book we knew was being written at the time. It was written by then a reporter for the Wall Street Journal named James Stewart. We knew he was writing a book because he was interviewing as many people as he could. At one point, he reached out to our media consultant and said, we'd like to talk to somebody in the Milken Group because we're willing to put in his side of the story. So I met with the guy a couple times. And the way he represented it to me is I want to give your side of the story. I want my readers to make up their own mind. Ted, I don't think the name of the book as readers should make up their own mind. But that's what he told me. I got these transactions. If you could tell me your side, I will put it in the book.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “After all this time, there have been things written, there were books written about it at the time, I think the one that people know best was Den of Thieves that talked about all these things that certainly painted Mike in a bad light. And I'd love to hear your response from being there of a book like that.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Person that they said he gave the booklet to denied it ever happened, but the judge concluded at the end of Fanico government failed on transaction one, two, and three, but there's an indication here of obstruction of justice. And she gave him a 10-year sentence, which number one negated what we thought was a cap of five years because she gave him two years on five counts to be served consecutively, not concurrently. It was actually a devastating blow because nobody would settle in this kind of case if they thought they were going to get a 10-year sentence. Eventually, obviously, we got that reduced.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Not one thing that they said that they could prove. He didn't commit any other crimes than what he pled to. That's it. Unfortunately, in the course of the hearing, you had certain witnesses saying that, well, Mike told me that I couldn't produce anything I didn't have. Or Mike told me, if I want to get rid of anything now is the time to do it. And when they were asked, well, did you get rid of anything? No. Did he ever come back to you and ask you if you got rid of anything? No. Well, what do you think he meant? Well, I'm not sure. And then one person said, he did ask me to give a booklet I had about my relationship with one of my clients to somebody else and I never saw it again. Mike didn't testify at Fatico, but denied any of those things.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Government, you said he did all these other things. He says he didn't do anything else. I'll give you 20 hours. Show me anything else he did. Pick one, two, three, four, whatever you want. You pick it. Show me he did anything. And if you can show me he did anything else, I'll take that into consideration. We thought that was not a fair process because we had a proven negative. They're going to say we did something and all we can do was we could prove we didn't. We asked, can we use some time to prove the legitimacy of his business? And what he accomplished? The court said no. Can't do that. So they picked three transactions. One they said was insider trading. One, they said it was stock manipulation. One was they bribed money managers and all these different things. And we held this hearing. It went on for several weeks. And the judge concluded that they proved not.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “What he had done in the community, how he cared about people, how his business was so legitimate and how he changed the world and all these different things. So the judges sitting here with these two different memorandum and she decides to hold the hearing called a fatical hearing. Maybe the first time a fatical hearing has ever been held in a white column matter. Anyway, she held the hearing and she said,”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Think maybe we can get it down to two or three. That was our goal. And the government agreed. They stood up and told the judge, that is true, Your Honor. We have in the past done that, but we're not doing it here. And our agreement was also they weren't supposed to recommend a sentence. So we filed sentencing memorandum. Now, we were supposed to exchange drafts of sentencing memorandum for whatever reason, which was to me a huge mistake, we never did. Their sentencing memorandum was devastating. It cubed Mike of being one of the worst human beings in history. His entire life was supposed to be a fraud and in the markets, and he did this and he did that. And what he pled to was just scratching the surface. And here's all the other terrible things he did. And we want you to take that into account. And we fought a sentencing memorandum saying he never did anything else other than these regulatory things that he pled to. And look at the life he's had over 100 letters of people of what he'd done in full.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Between the plea and sentencing, the way the process works, is a government files a sentencing memorandum as to what they think the sentence should be, and you file a sentencing memorandum as to why this is an operation. These aren't that serious, and why the penalty should be much less. In this particular case, because Mike pled to six counts, we were very concerned about the fact that there was so much leeway in what the sentence could be. And we made a deal with the government that at the plea Arthur and Lyman, Mike's lawyer, would stand up and say, Your Honor, because of the circumstances of this case, we have an agreement with the U.S. Attorney that they will not recommend consecutive sentences. That means you would be capping the largest sentence at five years. And we figured if it was capped at five years through our arguments and through our sentencing memorandum and everything.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “Bankruptcy So that also didn't help Mike because everybody said it was my fault that they declared bankrupts, though he was gone.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Drexel announced when they pled that after they paid their fines and penalties and everything else, they still had over a billion dollars of unincumbered equity capital in the firm. So the firm was in good shape financially to proceed. So Drexel now was operating for the first time ever since it had become a major player on Wall Street without Michael Milton. What had happened is to prove they could still get deals done, they were taking a lot of securities that they couldn't sell into inventory. And they were financing it by issuing commercial paper in the commercial paper market. So in financial parlance, they were borrowing short and lending long. When the commercial paper market dried up for Drexel because they had all these securities in their inventory, they couldn't make their financial obligations. And within a year, they declared.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “The confirmations on these trades did not disclose that there was a commission involved in it. I promise you, nobody's ever gone to prison for recouping commissions on trades before. So those are the natures, the things he did. But should he have done it and not done it, that's a different issue, but should a person go to prison for that another issue?”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Economic effect of these violations was zero. Not one penny was lost with another client, he had a high yield fund, and Drexel was charging Mike's department with commissions. It was paying to its salesmen for selling the fund. So he went to the money manager of the fund and goes, look, I'm paying all these commissions. I want you to do certain trades where I'll give you credit. Every trade is done. There's a bit in an ask. It's a bond. So your bid is 91 and a quarter, my ask is 91 and three quarters. You settle somewhere in between that. So Mike's comment was on certain transactions, if you're buying it, I want you to buy it at the ask. And if you're selling it, I want you to sell it at the bid, all within the market, but we won't negotiate, and I'll give you credit. And Drexel's management agreed that he could do that. Well, what he pled to was a mail fraud because”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “There was a net capital violation that Boski apparently went to somebody else that he dealt with a Drexel that worked for Mike and said, I got to get some securities off my books because otherwise my capital is going to drop below the regulatory requirement. So if you'll buy these securities, I'll buy them back from you later on at no loss, which would be inappropriate. Never prosecute it, but inappropriate. What Mike pled to is he didn't make the deal, but he heard about it. He approved it, but instructed the person to sell it back to him right away. I don't want to keep it on my books. So that was a neck capital violation. They were all things like, I'll make it up to you, whatever else. Interesting enough, when the judge assessed the economic damage to the marketplace from everything Michael pled to included on the three counts that related to Boski that the total”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “I guarantee he didn't have any idea how he'd make it up to him. The idea being that, hey, someday I'll find a good security, something that I think's valuable, I'll recommend it to you, legitimately and everything else. But anyway, the violation was, since a 13D is supposed to disclose everybody who has an interest in the security, theoretically, Mike Milken's saying, I'll make it up to you means he had an interest in the security. So Boschi should have amended his 13D. So, these are the kind of things he pled to. Do you really think that Mike Milken was thinking at the time? I wonder if he's going to mend his 13D or not. But he aided and abetted enough. I don't think anyone's ever gone for prison for a false 13D.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “Take one would be aiding and abetting another person and filing a false 13D. So, what did that involve? Mr. Boski owns stock in a company called Fishback, and he had more than a 5% interest, and he filed with 13D as he was required to do. He complained to Mike that it was a bad deal because he'd asked Mike, what did Mike think about it? Mike says, it might be a good deal because a client of Drexel's had made a public statement that he wanted to acquire this company. So it was in play. He never acquired it. So Boseki complained to Mike that he never acquired it. Mike's comment, well, you know what I know. I didn't give you any anti-permission. It was not my fault. And just to get him off the phone one day, he said, and I know this sounds kind of funny, but he said, fine, if you actually lose money on that, I'll make it up to you.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “Because he knew what he was doing and he was really good at it. His view was he can continue doing that. Whatever it cost to settle is what it costs. We had to figure out a number. We didn't want to do what Drexel did because he just didn't want to be painted with that picture. We came to a dollar number to pay. We paid a way to do it and we came to transactions to plead to. So he decided to settle. And in the course of the settlement, we got to a point where we got stalemated and they came back to us and said, Well, if he'll settle, we will also drop all charges against his brother. Which was unheard of in the Southern District, which was a confirmation as to why he was in the case in the first place.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  30. “And it came down to we need six counts because Drexel pled to six counts, and you're going to have to do the same thing. And you're going to have to pay $650 million because Drexel paid $650 million. We said, look, we're not Drexel, we're not a corporation. I don't care what they did. We're not paying what they paid, et cetera. And we finally got to a point where we could pay, I think it was $500 and still had to be six counts. And then they said one of the counts has to be insider trading. So we said, well, we're not pleading to anything we didn't do. So let's not talk any further. They said, well, okay, okay, well, one of them will be conspiracy. We got to find five transactions. Three of them had to be with Boski. And that's what we did. We actually found things to plead to none of which had ever been subject to criminal prosecution before, many of which hadn't probably even been enforced as regulatory violations before. But we found things that he could admit to. We came to an agreement on the money. Most people probably don't accept this, but like I said, I've known Mike my entire life. Money was never the issue. Mike made a lot of money.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  31. “Well, we prepare to go to trial, figuring that we could win the trial, though we have to convince a jury. But at the same time, we started exploring the idea of how do we cut our risk. And we started having conversations with the prosecutors. And those discussions got to a point where we realized we probably could settle without making cases. Don't forget, up to that time, if you wanted to settle, the way you settle with the government is you make cases against others. That's what Mr. Boski was able to do. That's how you get a good deal in settling make cases against others. Well, Mike didn't engage in criminal activity, so he wasn't in a position to make cases against others. Number one, number two, I don't think his personality is such that he could make cases against others. So once they said you don't have to make cases for others, we started negotiating with them as to, so what do we have to do?”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  32. “In it, he says, It doesn't surprise me. That's not what Rico's for, but Rudy Giuliani, who is a US attorney for the Southern District of New York, is the biggest piece of political meat I have seen since Tom Dewey. And for those that don't remember Tom Dewey, He was U.S. attorney for the Southern District of New York, and he used his position for a political career. He went on to be governor of New York and later ran for President United States, almost got elected against Harry Truman in 1948. Rudy Giuliani clearly had a political ambition, became the mayor of New York, and as we all know, had aspirations to become president of the United States.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  33. “Rico is the, I think it's called racketeering investigation, corruption, whatever, act. It's an act that was passed by Congress that was really intended to give prosecutors even greater powers when it came to going after organized crime. Under RECO, if you're a criminal enterprise, they could freeze all the assets of the enterprise during the investigation, and you have to forfeit all those assets if you're found guilty. The amount of time that you would have that's been in prison for every count of Rico you violated is much higher. So in a securities fraud, it's five years. Rico, it's 20 years. So it's a very powerful statute that really was not designed to be used against a financial firm. In fact, when I taunted Ed Williams that first day in November of 1986 and I read him the subpoena and he heard it had a record.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  34. “Employees are safe. So Drexel was scared they were going to go out of business if they didn't do something. They had 10,000 employees and they felt their obligations went beyond just one person. So whether I agreed with them or not really isn't important, but that's why they decided to settle.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  35. “So even though Princeton Newport case was reversed on appeal, and then the government never retried it, the fact that Princeton Newport was out of business before the trial started really got the attention of Drexel. What's going to happen with our lenders if we go to trial on a Rico case? What are we going to do? Likewise, there was a particular assistant that worked in the high-yield bond department who was indicted for perjury. They went after her as an important case in that she was an innocent individual, that the government, I don't know, was the FBI or the postal inspectors came to her house at 9 o'clock one night and started asking her questions and then she started answering, then she stopped answering and then later in front of the grand jury, they said she was perjuring herself. And they went after her and they convicted her. That also sent a message to Drexel that none of our”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  36. “Couple things had happened. The government indicted a firm called Princeton Newport, which was a Drexel client. The prosecutors at the time had told the principals and the lawyers for Princeton Newport that they're going to run over them. They're going to destroy them unless they help them against Michael Milken and another case that was under investigation at the time, a guy named Bob Freeman, because they had relationships with both. They brought a Rico case against Princeton Newport, which was a very respected firm. Case went to trial and Princeton Newport lost. The firm was out of business before the first witness was called in the trial because under Rico, you could create a freezing of assets and as a financial institution that's very, very”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  37. “They admitted uncertainty of the transactions that were in the indictment. They said that we don't have the information to dispute it, and therefore we are willing to plead to have done. I don't remember the counts exactly what it was. They paid a very large fine. I think they paid $650 million out. Part of that went as a criminal penalty and part of that went as an SEC disgorgement fund because they settled with both the SEC and the U.S. Attorney because they had to do with. It could have been some of the transactions. It could have been a 13D violation. I don't know. I mean, a lot of this stuff was very regulatory, but the biggest issue was the fact that Mike was now gone from Drexel. He wasn't there anymore. And the firm had an interest in being cooperative with the government and in fact had a requirement to cooperate with the government. And so where the firm had been fighting the charges before, it was now cooperating on it. All the forces were coming against us.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  38. “14 to 18 hours a day. Your brother's exposed, you're exposed. You know what you didn't do. But then you've got Ed Williams who unfortunately passed away early on. But who said to me early on, everything I've seen shows that Mike is innocent here. But my biggest fear is I can't tell a jury that this guy made this much money because he made an incredible amount of money is not guilty of something. That's my concern. And now he's exposed to 20 to 40 to 80 years of prison because of Rico and everything else. And the pressure's building to a point where he says everybody else is making a deal. What are my options?”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  39. “They've pled guilty saying that they didn't have enough information to dispute the accusations. They settled with the SEC and the U.S. attorney. This is before you've even been indicted. You talk about innocent until proven guilty. It's part of their settlement. They had to fire Michael. They had to separate from him. Then they had a provision in the settlement of the SCC that said that no employee of Drexel was allowed to talk to Mike about any business transaction Drexel was involved in. So now you have a person that hasn't even been indicted, let alone proven guilty beyond a reasonable doubt, who has now been declared guilty by the firm that he helped build and work for because they're going to get rid of him and they're not allowed to talk to him. So now you have the entire firm against you where you work. You're not working there anymore, which is what you did every day for four years.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  40. “I think there were 12 transactions in the indictment. 98 counts. If there's one transaction and you mail three letters, that's three mail frauds. So now we study all the transactions. We look into it. So now we have an idea what the charges are and we start repairing our defense. That's what we're doing. Meanwhile, the pressure is building. You have these articles that are not accurate that are appearing almost on a daily or weekly basis in major newspapers and magazines about what a horrible person you are. In this case, you got your brother is under investigation and then indictment. And he wasn't even involved in most of these transactions. So you know he's there only because he's got the same last name you have, which is borne out. History's proven that to be true. And you're looking around and some people that work for you are all getting immunity. People that work at your clients are getting immunity. And now Drexel has settled.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  41. “Other. They do have different things. There was something they called Queen for a Day. Well, you could come in and have immunity for one day. But that doesn't mean they can't use it against you later because you only have immunity if you tell the truth. And if they learned something later and you didn't tell them the truth, they can use that against you. Nobody ever does that. Nobody ever brings the witness in early on when they are really the subject of the investigation.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  42. “They never do, certainly as a lawyer. Well, you know what? We want to cut this off, Mr. Prosecutor. Why don't we bring our client in to meet with you? And you'll see that he's telling the truth. So you can do that. The problem is nobody would do that because the risks are too great. The risk are too great that they won't believe them, but they'll take something that he said, and they'll use it against him. And now you're disclosing to them your defense. The only thing that they don't know at this point is what your defense is. So now you're taking the person that has all the power who's trying to destroy your life, and you're telling them whatever you want to tell them. They're not telling you anything. And so nobody does that. To me, that's the flaw of the system. I really think it would work a lot better if there was a method for people to come in and talk and get to know each other.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  43. “One of the flaws in the system is they never get to know the person under investigation. They only get to know the witnesses that they've immunized or that have pledged guilty to them. Those are the only people they get to know.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  44. “So, I think the motivation is that's how they get ahead. The prosecutor, as I quote him in the book, who came to my class later on, said that the way that prosecutors get paid is not in money. It's in being successful, and that helps our career. The more notice the case gets, the more important it is for us to be successful. And the problem is, Ted, at least that I see, is they should be trained to ask themselves what if we're wrong. We're dealing with human beings. This guy has a wife. All these people do. They have children. If we're wrong, what are we doing to their lives? But they don't ask themselves that question, or at least in the cases that I saw, they don't ask themselves that question. So it's not that they're bad guys and they're out to do something wrong. They believe in what they're doing. They believe they're witness.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  45. “Well, they made a deal with Ivan Boski and they made a deal predicated on him making other cases for them. And the prime case that he was going to give them was Michael Milken because of what he'd accomplished and what his position was in the industry at the time. So they had incentive to say, well, we didn't make a bad deal. They had an incentive to say that what this guy was telling them must be true. And if we could get other people to tell pieces of it or whatever else, it must be true. I think that's how they're trained. They're trained to say we made a deal with this guy. He said this guy did this. We bought onto it. Let's find out if he did it. And by the way, it's in our interest to find that he did do it. And what's he doing in our office anyway? We didn't tell Ivan Bosky to do business with him. They did business together.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  46. “You'd like to think that knowing they have that power, they wouldn't proceed in such a way unless they felt like they were doing their job and seeking truth. So what were their motivations in going after Mike if, in fact, you don't think you did anything wrong?”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  47. “All the power, all the weapons are in the hands of the prosecutor, and if the prosecutor's goal is to win, somebody said to me early in the investigation at Fence Lawyer who had been in the Justice Department that if the government wants to get you, they're going to get you. And I can't believe how committed the Justice Department in this case is to Michael Milton. I don't know why, but that's it. And they want to get him. At the time, I dismissed it. Later on, it kept haunting me, that comment.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  48. “We're investigating the ABC transaction. And we see the transaction happen and we believe that there was some illegal understandings and agreements here. Can you help us in proving our case? Because if you can, we'll give you immunity. If you can, we don't want you to lie. So if you can, we won't give you immunity. But if we learn later that you were involved in these transactions and we do bring a case, then we're going to indict you. This is a RICO case. Under RICO, your assets are in jeopardy as well as your freedoms in jeopardy. They have that tool. If I go to the same person and I say, look, you're still working for Mike. Your bonus is coming up in a few months. We'd like your cooperation. This is what we believe happened. And we really do believe this happened. Do you remember it that way? This could be helpful to us. It could be helpful to you. Get indicted for obstruction to justice. I can't do that.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  49. “And the government has tremendous power. Prosecutors were given this power so they could put away bad guys. But their job is to see the justice is done. Their job is to seek the truth. And as was said by the Supreme Court, it's not to necessarily win a case. It's to see that the guilty are punished and the innocent are not. That's their job. What I found was these young guys, they're not bad guys. They're young attorneys. They're aggressive. They're trained to believe in what they're doing. The guy wouldn't be under investigation if he didn't do something wrong. Now go figure out what it was. And they use their power to win. It's not a level playing field because they have all the tools until you get indicted. Until the day you get indicted, you're not entitled to any information. But remember I talked about they give immunity to a witness. So they go to a witness and they say,”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source

  50. “Right. You don't get any information from the government as to how they're doing it. And at this point in a high profile, highly publicized case, you're really not innocent in the court of public opinion. The articles are about, they must have done this, they must have done that. The expectation now is that you did something. The other thing I learned is that the Southern District of New York, they consider themselves the prime office of the Justice Department, and they can't be wrong. Their job is to protect their reputation. So once they allowed the information to be leaked, that this investigation was heading towards indictment against whether Strexel or Michael Milken or whatever else, they can't be wrong. They're going to prove that they're right and they're going to defend themselves. One of the reasons I wrote the book is so people understand that today the process is no different than the process was when we went through it.”

    2024-03-04 · Capital Allocators · Richard Sandler – The Prosecution of Michael Milken (EP.372) · IDENTIFIED FROM THE TRANSCRIPT · source