PEOPLE : Sachs to Quit Columbia S&L; Involved in Probe of Milken
A top Columbia Savings executive who had been granted immunity from prosecution in exchange for his cooperation in the government’s investigation of former Drexel Burnham Lambert junk-bond chief Michael Milken is resigning.
The resignation of David A. Sachs, 30, as chief financial officer of the troubled Beverly Hills thrift is effective May 11. Sachs held the post only three months after the thrift’s previous chief financial officer left. His principal job at Columbia has been executive vice president of investment management, including the thrift’s huge portfolio of risky, high-yield junk bonds, now valued at about $3.38 billion.
The resignation came a day before Milken is expected to plead guilty in New York to six felonies and agree to pay $600 million in penalties, but the timing of the resignation is coincidental, sources said. Milken’s decision to plead guilty came last Friday as prosecutors were threatening to file expanded charges against him.
Neither Columbia nor any of its executives were expected to be named in the expanded Milken indictment. But prosecutors were expected to allege that Milken helped arrange tax law violations by Columbia. No charges have been filed against Columbia or any of its executives.
Sachs, through a Columbia lawyer, declined comment, but his resignation is no surprise, although it did come sooner than expected. Columbia was effectively forced out of the junk bond business by last year’s federal thrift legislation. And the plunge in junk bond prices the past few months rendered it insolvent, putting it in danger of being seized by regulators.
Columbia said Sachs is leaving for other unspecified business opportunities. He is the fourth top Columbia executive to resign since last fall. The other three are former Columbia President Lawrence K. Fish, former Chief Financial Officer James A. D’Aquila and Thomas Spiegel, the thrift’s former chief executive and architect of Columbia’s venture into junk bonds in the 1980s.
Edward G. Harshfield, Columbia’s new chief executive, will serve as acting chief financial officer until a successor for Sachs is found.
