Will the SEC Investigate What Matters About Milken?

1 min read

For those who missed it, news broke this week that the Securities and Exchange Commission (SEC) is investigating Michael Milken for allegedly violating his life-time ban from working in any capacity as an investment advisor. The investigation reportedly is focused on Milken’s relationship with Guggenheim Partners, a big investment firm, but as readers of DeepCapture know, there is much else the SEC should be investigating so far as Michael Milken is concerned.

For starters, the SEC might want to read our story “Michael Milken and the Story of Dendreon” (or my book, “The Dendreon Effect: How Felons, Con-Men and Wall Street Insiders Manipulate High-Tech Stocks“) because that story (and the book) demonstrate that Milken has not only violated his ban from working as an investment advisor, but has also violated (but, of course, not been charged for) a host of other laws, from insider trading to influence peddling and scheming under the cloak of his cancer “charity” to manipulate the stocks of publicly listed pharmaceutical companies.

More specifically, Milken has used his Prostate Cancer Foundation to “capture” a few of the nation’s most prominent cancer doctors and to promote (with help from the doctors) pharmaceutical companies in which Milken and/or Milken cronies have large investments. Meanwhile, Milken and his associates have schemed to destroy at least one pharmaceutical company (i.e. Dendreon Corp.) that had a promising treatment for prostate cancer (and which was a competitor to companies promoted by Milken’s Prostate Cancer Foundation).

In addition, Milken and his associates have (with the help of those same doctors) “captured” the Food and Drug Administration (FDA) so as to influence FDA decisions about treatments for prostate cancer. This influence peddling, of course, has involved convincing the FDA to endorse treatments that were developed by companies with ties to Milken, and it has involved convincing the captured FDA to delay approval of Dendreon’s promising prostate cancer treatment (one that could have extended the lives of 60,000 men during the three years while Milken’s cronies successfully schemed to keep it from coming to market).

Unfortunately, the (captured) SEC is not (so far as I  know) investigating the more egregious infractions. In addition, Milken has successfully captured most of the major U.S. news organizations, all of which have bought into the party line put forth by Milken’s impressive public relations machine that Milken was one of Wall Street’s all-time greatest “innovators” in the 1980s, when he ostensibly helped build some of America’s most successful companies, but has in more recent years devoted the greater portion of his efforts to “philanthropy.”

Actually, Milken deliberately destroyed far more companies than he built during the 1980s, but it is true that his finance helped grow the media empires of both Ted Turner and Rupert Murdoch, and neither of those media empires have ever shown any inclination to expose Milken’s miscreancy. Nor has Fortune Magazine, which was one of the first to report this week that the SEC was investigating Milken, but was quick to remind its readers that Milken was a prominent “philanthropist” who had featured in a Fortune Magazine cover-story (title: “The Man Who Changed Medicine”) that trumpeted Milken’s good-deeds in the field of prostate cancer.

Ack. So it goes…

 

 

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12 Replies to “Will the SEC Investigate What Matters About Milken?”

  1. All you need is a billion dollars and your a politician’s dream. Folow their money. Where did it all come from.

  2. U.S. Senator Orrin Hatch spoke at the Milken Institute in May 2010. A senior member of the Senate committees on Finance, the Judiciary and Health, Education, Labor and Pensions, Hatch gave a wide-ranging view of current public-policy debates in Washington. After his talk, Hatch turned to Mike Milken and said, “Thank God for the Milken Institute and what you’re doing. You’ve been a hero of mine for many years. I think if more people like you would get involved, we could bring a better spirit to America…and it’s time we do that.” Watch an excerpt from Senator Hatch’s remarks.

    http://www.mikemilken.com/photos.taf?photo=250

  3. Slighly off topi. but not really. I think we will be see less intial responses from now on!!! Thanks to Patrick and D.C. who called this about 4 years ago…

    SACked: Cohen Considers Closing
    Submitted by Tyler Durden on 05/20/2013 – 16:40
    It appears that the noose is tightening and the wobbly-chair that Steve Cohen is standing on is getting wobblier… As Bloomberg reports, after five years under investigation for insider trading Steve Cohen is considering a ‘deal’ with prosecutors that would shut his $15 billion fund to outside investors and (as we noted this morning) shift a family (friends and employees) office.

    *COHEN SAID TO HAVE DISCUSSED DEFERRED PROSECUTION AGREEMENT
    *COHEN SAID TO CONSIDER RETURNING OUTSIDE INVESTORS’ MONEY
    *COHEN SAID TO CONSIDER CONTINUING AS A FAMILY OFFICE
    The deferred prosecution is intriguing as “when a company enters into a DPA with the government, or an NPA for that matter, it almost always must acknowledge wrongdoing…” and the clock is ticking with the statute of limitations up at the end of July.

  4. http://en.wikipedia.org/wiki/Valerie_Red-Horse

    She is also a former office manager for junk bond king Michael Milken and the former CEO of an insolvent Financial Industry Regulatory Authority (FINRA) broker/dealer Native Nations Securities, which was the brokerage behind the largest payout in Securities Investor Protection Corporation history.[1]

    She took 176,000 brokerage accounts down on Sept. 11, 2001 with Adnan Khasshogi, (Lady Di’s boyfriend Dodi Fayed’s uncle).

    I believe Milken is in this way deeper than people realize. Is he the “Master Manipulator”?

  5. Mark

    Right on target as always. Your book is sold out on overstock.com but I am picking up another for a friend as soon as they e-mail me availability.

    Thanks for all you do!

  6. ‘Brazen Fraud’ Alleged at Dendreon Corp.

    Wednesday, May 22, 2013Last Update: 11:42 AM PT
    By JUNE WILLIAMS

    SEATTLE (CN) – Directors of Dendreon Corp. committed “brazen fraud” by dumping $85 million of their own shares at inflated prices while falsely claiming its expensive cancer drug Provenge was “completely sold out,” shareholders claim in court.
    Investors sued Dendreon and its top three officers, CEO Dr. Mitchell H. Gold, COO Hans E. Bishop, and CFO Gregory T. Schiffman, in Federal Court.
    “The revelation of the company’s fraud was devastating, erasing $3.5 billion from Dendreon’s market capitalization in a single day,” the complaint states. “Unlike defendants, who were able to sell substantial holdings of Dendreon stock before the fraud was revealed, the company’s unsuspecting shareholders suffered crippling losses. As TheStreet.com put it, Gold had turned out like other Chief Executive Officers who had ‘hone[d] the fine craft of investor bamboozlement.'”
    Dendreon’s only FDA-approved product is Provenge, a prostate cancer treatment, the shareholders say in the complaint.
    “From April29, 2010 through August 3, 2011 (the ‘Relevant Period’), defendants repeatedly touted the strong demand for Provenge, which the Company claimed was so strong that it was overwhelming the company’s ability to meet the demand,” according to the complaint. “At numerous investor conferences, on conference calls and in its filings with the U.S. Securities and Exchange Commission (‘SEC’), defendants emphasized the ‘very strong demand,’ the ‘incredibly high demand’ and the ‘no shortage of end-patient demand’ that existed for Provenge, which demand, according to the Company, purportedly was ‘exceeding our ability to supply the market’ and was resulting in ‘completely sold out capacity’ and ‘substantial waiting lists’ for treatment with Provenge. To underscore their statements, defendants followed up with bullish financial guidance to investors, projecting revenues of $350 to $400 million from Provenge in 2011.”
    But the shareholders say the individual defendants knew the rosy statements were “completely false” and were receiving weekly reports from sales managers warning of low sales.
    “As has now been revealed, these statements to investors were completely false. Furthermore, defendants knew at all times that these statements were false,” the complaint states. “As confirmed by former Dendreon employees, the company’s regional sales managers repeatedly warned defendants at weekly meetings that defendants’ statements had no basis in fact, and that the real demand being observed in the field was running at a much lower rate. Not only were these warnings communicated verbally at numerous meetings, the evidence backing these warnings was provided to defendants in the form of various internal reports that were disseminated to all members of senior management, including defendants Gold, Bishop and Schiffman.”
    But the defendants continued to issue optimistic statements about Provenge, while dumping their own shares at huge profits, the shareholders claim. Gold sold his shares for $35 million, according to the complaint.
    “All the while that they were disseminating these false statements to unsuspecting investors, defendants themselves were busily offloading their own holdings of Dendreon stock. During the relevant period, Dendreon’s officers and directors realized over $85 million in proceeds from insider stock sales. Defendant Gold, Dendreon’s chief executive officer, personally reaped over $35 million from the sale of Dendreon stock during the relevant period, including millions from sales made just weeks before the fraud was revealed to investors.”
    Shareholders claim the defendants were forced to “come clean” on Aug. 3, 2011, after close of trading, and admit the quarterly growth for Provenge would be “modest” at best. Dendreon also disclosed that demand for the drug had been hurt by physicians’ concerns about reimbursement and that the company was slashing its workforce by 25 percent, according to the complaint.
    Lead plaintiff Dr. Christoph Bolling and 23 other shareholders seek disgorgement and damages for fraud, negligent misrepresentation, and violations of securities and consumer laws.
    They are represented by Christina Haring-Larson with Slinde Nelson & Stanford.

  7. Anon.. let me give you a more on topic story that is a lot bigger than the legit selling of 85 million is stock.. how about shutting down a 15 billion dollar criminal enterprise?LMAOAU!!!! Jail time cometh baby!!!

    May 23, 2013, 7:35 p.m. ET
    Four Top SAC Executives Receive Subpoenas in Probe

    By JENNY STRASBURG And MICHAEL ROTHFELD

    The government issued subpoenas to four senior executives of SAC Capital Advisors LP who are part of Steven A. Cohen’s inner circle, including the firm’s president and chief compliance officer, according to people familiar with the matter.

    The subpoenas, issued within the past few weeks, are part of the government’s insider-trading investigation of SAC. In seeking information from some of Mr. Cohen’s most-senior and longest-serving deputies, prosecutors are trying to increase pressure on the firm ahead of a looming deadline to file securities-fraud charges related to trading that involved Mr. Cohen, according to people familiar with the matter.

  8. Well, good to hear this, Mark.

    When Bharara closed up the SAC case and went after Gupta, he made a mistake.

    Maybe he can make up for it, and get to the stripping and looting, instead of the relatively petty matter of insider trading.

    If you don’t mind, I might post related links to your site.
    Good going.
    Lila Rajiva

    1. Had to pick on an underling, apparently.

      And exactly what is the difference between an underling and a fall guy?

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