The Securities and Exchange Commission took a long-expected step Monday and banned former Drexel Burnham Lambert junk bond chief Michael Milken from the securities industry for life.
The SEC also imposed a permanent ban on his brother, Lowell. The orders were part of a settlement of SEC administrative charges pending against the two.
Michael Milken, 44, earlier this month began serving a 10-year term at a minimum-security federal prison in Northern California. After pleading guilty to six felony counts last year, he also paid $600 million in penalties.
The permanent ban was expected because Milken pleaded guilty to multiple felony counts. The SEC, however, could have imposed lesser penalties, such as a ban that allowed the brothers to reapply for securities industry positions after several years. The permanent ban means that the Milken brothers can never again work for a securities broker-dealer.
Lowell Milken, 42, a lawyer who acted as one of his brother's main advisers at Drexel's Beverly Hills junk bond headquarters, was indicted on securities fraud charges along with his brother. But all criminal charges were dropped as part of the settlement under which Michael agreed to plead guilty to the six counts. Lowell has denied any wrongdoing.
A spokesman for Milken declined to comment on the SEC order.
Lowell Milken's lawyer couldn't be reached immediately for comment. However, the lawyer, Michael Armstrong, had said earlier that Lowell would resume practicing law.
Lowell also has a central role in the affairs of a large number of private partnerships that the Milkens established while at Drexel.