Trashing the Junk-Bond King : THE PREDATORS’ BALL The Junk Bond Raiders and the Man Who Staked Them <i> by Connie Bruck (The American Lawyer/Simon & Schuster: $19.95; 385 pp.; 0-671-61780-X) </i>

Pitfalls await the author who writes a book on a fast-breaking subject. The facts in the book may be eclipsed by new revelations. The absence of an ending for the story may leave readers unfulfilled.

However, the author who digs beyond the headlines to bring out new insights and information on a hot topic can contribute immensely to the public debate, satisfy readers and cash in on the commercial benefits, too.

“The Predators’ Ball: The Junk Bond Raiders and the Man Who Staked Them” falls clearly into the latter category. Author Connie Bruck has written a vivid, rich account of one of the most controversial figures in American finance, “junk-bond king” Michael Milken.

There is plenty of new information here about Milken and the way he runs an empire that has financed and, in some instances, created the corporate raiders who have changed the face of corporate America.

The book has even generated its own pre-publication headlines. Milken’s employer, the investment house of Drexel Burnham Lambert, is mounting an attack on its accuracy that rivals the hostile takeovers that the firm has waged for such corporate raiders as Carl Icahn and Ronald Perelman.

Milken and Drexel are justified in being concerned about the unflattering portraits of them painted by Bruck, a reporter for the American Lawyer magazine in New York.

Milken comes off as almost maniacal in his craving for power and control, demanding total allegiance from his associates and telling Meshulam Riklis, a Drexel client, “You’re working for me. You own a lot of the equity in your companies, but I own your debt . . . . Riklis is working for Milken.”

Bruck illustrates what she describes as Milken’s obsession for secrecy by recounting a telephone conversation he had with a client. Milken heard a noise in the background on the client’s end of the phone and demanded to know who else was in the client’s office. The client explained that it was a pet parrot, and Milken shot back, “Call me back when the parrot’s gone.”

In a more ominous section, the book details a previously unpublicized investigation of Milken’s profits from the purchase of Caesar’s World bonds about the time Drexel handled a transaction that pushed up the value of the securities.

Drexel itself rose from meager beginnings in the 1970s to become the most powerful firm on Wall Street, largely on the strength of Milken’s creation and dominance of the junk-bond market. Bruck describes a firm that intimidates competitors and turns a blind eye to Milken’s conflicts of interest to keep the profits rolling in.

“This was the Drexel--the brass-knuckles, threatening, market-manipulating Cosa Nostra of the securities world--that its rival investment bankers and corporate targets loved to hate,” writes Bruck in describing one Drexel deal.

It did not start out to be this kind of book.

When Bruck began her project in 1985, insider trading was not a familiar phrase in the lexicon of headline writers, and Drexel was riding high as the most profitable house on Wall Street. Its president, Fred Joseph, arranged for Bruck to interview executives, including the elusive Milken, with the expectation of a friendly book.

The engine behind that rise was the junk-bond market Milken had created. The concept was simple: Milken determined that low-rated, high-yield debt could provide a return to investors that far outweighed their added risk.

Initially, Milken invested in the bonds. Then he began issuing them for companies that could not raise money through conventional debt. Eventually he used them to raise billions for the raiders who threatened to take over companies large and small in deals that were friendly or hostile.

“The Predators’ Ball” explains the workings of the junk-bond world in language that average readers will understand, and Bruck illustrates its workings with fascinating examples that shed new light not only on Milken but on many of his clients, most notably Carl Icahn, the man who recently lost his bid to wear the star at Texaco.

Every spring in Beverly Hills, where Milken had his office in a building that Drexel rented from him, these raiders and other clients would gather to fete themselves and Milken. The annual event became known as the predators’ ball.

Bruck writes that she started out admiring Drexel as an underdog that dared to take on the Establishment. But, long before the presses started to roll on her book, she says she had learned enough to strip her of any admiration for the tactics of the firm and the architect of its ascendance, Michael Milken.

Drexel’s fortunes soured along a parallel course. Dennis Levine, one of its merger specialists, was caught in an insider-trading scandal that eventually engulfed stock speculator Ivan Boesky, a major Drexel client and Milken confidant, and brought the firm and Milken under investigation.

That the federal investigation of Drexel and Milken is continuing leaves Connie Bruck without an ending. The weakest section of her book comes when she relies on newspaper accounts, mostly from the Wall Street Journal, to describe the areas that investigators are supposedly examining.

By this point, however, further speculation is unnecessary. Readers will already have had their fill of the junk-bond king and his empire.