At 87 years of age, U.S. District Judge Milton Pollack has seen his share of financial disasters.
His career as a securities lawyer started two weeks before the 1929 stock market crash. Sixty years later that experience helped him clean up a multibillion-dollar mess stemming from the fall of Michael Milken and Drexel Burnham Lambert Inc., once one of Wall Street's most powerful investment banks, which collapsed into bankruptcy.
"Really, nothing has changed," Pollack said in an interview, comparing the similarities between 1929 and the yuppie era of the 1980s. "The greed incentive still remains as the driving catalyst for the excesses that occur on Wall Street.
"What has changed is the manner in which the cases are presented."
The Drexel case solidified Pollack's stature as a Wall Street legend, a gray-haired, seemingly mild-mannered judge with a reputation for making high-priced attorneys squirm.
Midnight telephone calls, harsh face-to-face meetings and a piercing intellect are tools he employs to force resolution of octopus-like litigation.
"I've appeared before him a number of times over the years and I would say that he's about one of the smartest people I've ever dealt with on the bench," said Stanley S. Arkin, a veteran defense attorney.
"You have to be very careful to get on the right side of him. He's a man (who) has a lot of common sense, and laced with toughness," he said.
That toughness was displayed last year when he grilled Milken, the ex-Drexel financier and convicted felon who appeared on the witness stand for two former clients, Victor and Steven Posner. The father-and-son investment team later was convicted of civil securities law violations.
In a subsequent decision, Pollack criticized Milken as an evasive witness unable to "accept the fact that he has done wrong."
As for the Posners, Pollack ordered them barred from serving as officers or directors of any public company and ordered them to repay about $4 million they gained from one of their businesses. Pollack described the two as "legendary people in the sense of being barracudas when it came to dealing with other people's money and other people's businesses."
Few attorneys interviewed about Pollack offered criticism of the judge. Those who did wouldn't speak on the record but generally complained about the pressure to arrive at settlements and his occasional tongue-lashings.
Pollack admits he can be tough on lawyers.
"I didn't allow the inconvenience of their having to come here to interfere with what I wanted to find out," he said from his office in Manhattan federal court.
Pollack clearly enjoys his work, putting in eight-hour days, then plowing through cases after dinner. "My theory of longevity is the harder you work, the longer you live," he said.
This is the spirit that led Pollack to resolve what could be one of the biggest, most complex financial cases of all time--the civil litigation surrounding Drexel and Milken.
When the Drexel bankruptcy case first came before him in 1990, claims against the fallen junk bond house vastly exceeded the $3 billion in assets set aside for creditors.
About 180 lawsuits were filed against Drexel, which Milken had built into one of the most aggressive securities firms through its dealings in junk bonds, the high-risk, high-yield IOUs that proliferated in the 1980s.
In September, Pollack gave final approval to a $1.3-billion settlement of the Milken-related litigation. Pollack calls resolution of the cases his masterpiece.
Memorabilia of the event decorate his spacious office: There are framed courtroom sketches of a Feb. 18, 1991, hearing (called on the President's Day holiday so attorneys couldn't use the excuse of conflicting cases) in which the outline of the agreement was concluded. There is also a framed, single sheet of legal paper that contains the scribbled terms of the Drexel agreement.
As a judge on senior status, Pollack can refuse to take cases, leaving him to focus on large, complex litigation. Attorneys in the Drexel case also gave him wide discretion.
"This entire group of lawyers got together and gave me carte blanche to talk to anybody on any subject at anytime without the encumbrance of anybody else being present," Pollack said.
Pollack stayed in touch with the numerous attorneys despite a crisis in his personal life--a severe heart attack suffered by his wife, Moselle. While she was hospitalized in Houston, Pollack made telephone calls from a doctor's office to the attorneys to ensure that they were meeting his deadlines.
Pollack's wife figured into another aspect of the Drexel case. In 1988, lawyers for Drexel and Milken tried to remove Pollack from hearing a Securities and Exchange Commission lawsuit against the defendants. They argued that the judge's impartiality was in question because Pollack's wife stood to gain $30 million from a buyout of her company, Palais Royal, which Drexel helped finance.
A federal appeals court upheld Pollack's decision to stay on the Drexel case. Ironically, Drexel was later represented by another law firm that specifically asked Pollack to oversee the subsequent bankruptcy case two years later.
Although he's best known for work on the Drexel case, Pollack made his mark long before then. As a private practicing attorney, Pollack won a $4.5-million shareholder lawsuit against General Motors Corp. in 1942.
Pollack ran his own law firm, specializing in securities law, from 1945 to 1967, the year President Lyndon B. Johnson appointed him to the bench.
As a judge, not all his cases have involved the arcane world of securities law. In 1975, he sentenced to 27 months in prison one of the members in the Weatherman Underground, convicted of a plot to bomb the federal building as a protest against the Vietnam War.
Pollack also issued a ruling allowing Concorde supersonic jets to land at John F. Kennedy Airport in New York, and issued a decision that allowed regulators access to secretive Swiss bank accounts to prosecute insider-trading cases.
One way he has kept abreast of the fast-moving changes over the years is by paying special attention to ideas from his young law clerks.
"They bring a new dimension to what you're doing. And you have to keep up with them," he says.
Pollack remains close to many of his clerks, all of whom gather for annual reunion dinners. Peter Wang, a clerk in 1973, recalls when the dinners started off as small affairs. Now they rent a ballroom.
At the last gathering, the normally private Pollack gave a short speech offering insight into the sacrifices necessary to be on the bench.
"Judges may not lead the ideal life that many people think they do," he said. "Being a judge is a lonely job, professionally and socially. They can't allow themselves to show the same range of emotions that other professionals can show during their work.
"Judges start keeping even their old friends at arms length."