Drexel Burnham

About Drexel Burnham

Drexel Burnham Lambert filed for bankruptcy on February 13, 1990. Drexel was the fifth largest investment bank on Wall Street. The firm was known for junk bonds, pioneered by Michael Milken. Drexel pleaded guilty to six felonies including stock manipulation and fraud. The SEC investigation was triggered by trader Ivan Boesky, who cooperated after being caught. Drexel paid 650 million in fines. Milken pleaded guilty to securities fraud and was sentenced to 10 years, later reduced to 2. Milken paid 1.1 billion in fines and restitution. The collapse of Drexel ended the 1980s era of leveraged buyouts financed by junk bonds. The bankruptcy filing listed 3.3 billion in assets. Many Drexel employees lost their jobs and savings.