Milken to Be a Witness for Defense : Securities law: Convicted junk bond king to testify in trial of portfolio manager he allegedly bribed.

Convicted junk bond king Michael Milken will testify on behalf of a former investment portfolio manager he allegedly bribed in exchange for buying junk bonds from Drexel Burnham Lambert, the manager’s lawyer said Friday.

Testifying for the defense will be a change for Milken, who has turned government witness to help cut his 10-year prison term for his financial misdeeds.

However, Milken did not volunteer to testify at the trial. Defense lawyers had to get an order from the judge forcing him to appear. The order was the equivalent of a subpoena issued to a prison inmate.

Jury selection in the case against Patricia Ostrander, who worked at Boston-based Fidelity Investments, is scheduled to begin Tuesday in Manhattan federal court. Ostrander, who lives in Brookline, Mass., is charged with two counts of bribery and one securities law reporting violation.

If convicted of all counts, she faces a maximum sentence of 13 years in prison and fines of $750,000.

Fidelity Investments’ high-yield fund was one of the largest and most powerful shoppers in the junk bond market between 1981 and 1988.

Ostrander allegedly accepted from Milken an interest in MacPherson Investment in exchange for purchasing for Fidelity some high-yield bonds in Storer Communications Inc.

The bonds were underwritten by Drexel as part of the leveraged buyout of Storer by a company created by the investment firm of Kohlberg Kravis Roberts & Co.

Ostrander left Fidelity in 1987 to set up Ostrander Capital Management.

In April, William Pike, the man who ran Fidelity Investments’ $1.7-billion junk bond fund during most of the 1980s, was disciplined by the Securities and Exchange Commission for falsifying the records of his fund’s dealings with Drexel.

He settled an SEC administrative complaint by agreeing to a three-month suspension from the securities business.

Milken, serving a 10-year sentence in a federal prison in California after pleading guilty to six securities fraud charges, has previously denied bribing investment managers and others controlling large investment portfolios to buy Drexel securities for their clients.

He has requested a reduction of his sentence and has offered to cooperate with federal prosecutors in other cases.

Milken testified against a former colleague last month who was found guilty on only one of five counts. Lawyers said they doubted that his testimony in that case would help him win a reduction.

Judge Kimba Wood, who sentenced Milken, has said she will consider his cooperation with the government when deciding whether to shorten his time in prison.

Lawyers close to the case said they believe that Wood’s decision could come as soon as next week.