Drexel Burnham Lambert

Drexel Burnham Lambert turned the junk bond into a weapon of finance, and through Michael Milken’s high-yield desk in Beverly Hills it became the fifth-largest U.S. investment bank by the late 1980s, financing the era’s hostile takeovers. The firm’s dominance rested on Milken’s network and on heavy leverage. Insider-trading investigations brought a 1989 guilty plea to securities and mail fraud and $650 million in penalties; Milken himself pleaded guilty in 1990. Cut off from credit and stripped of its franchise, Drexel filed for bankruptcy in February 1990 and was liquidated.