Michael Milken

Michael Milken speaks at the Milken Scholars Alumni Symposium in New York. (Peter Foley / Bloomberg / February 22, 2013)

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Federal regulators are investigating whether onetime junk-bond czar Michael Milken violated his lifetime ban from the securities industry, according to a published report.

Milken is allowed to manage his own wealth but is barred from running money for others under the terms of a 1980s settlement with the Securities and Exchange Commission, according to the article in Fortune magazine.

Here's what's happening, according to the magazine's article:

The SEC is analyzing whether Milken ran afoul of the ban by effectively providing investment advice through Guggenheim Partners, the investment colossus that spearheaded last year’s blockbuster purchase of the Dodgers. Milken has had as much as $800 million at Guggenheim.

The agency is probing whether Milken received some sort of compensation in exchange for effectively providing investment advice.

The SEC has put in a lot of effort, poring over tens of thousands of trading records and emails.

But, as the article points out, the probe has gone on for two years. That's a long time and may suggest that the agency is having difficulty with the case.

[Updated,  1:40 p.m. PST Feb. 27: A Milken spokesman pointed to a detailed response given to Fortune magazine.

Milken "discusses investments with these advisors from time to time, but only as an investor of his funds and those of his family," the statement said in part. "During this entire time, he has had no desire to be in the securities business in any capacity and has strictly avoided doing anything that could be interpreted otherwise."]

Guggenheim confirmed that the SEC sought information about Milken two years ago, but said in a statement that Milken "does not have an ownership or managerial role in the Firm in any way, shape, or form."

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