ABSTRACT
This chapter presents both the ordinary and the extraordinary networks. It makes clear that the unambiguous position of the government was that these acts were unlawful. Buyers of bonds include not only individuals, but corporations and institutional investors. Normally investment bankers work with other investment bankers to underwrite takeovers. Boesky invested in the companies' stocks in a fifty-fifty collaboration with Michael Milken. The private partnerships were originally formed by Milken as an avenue for him to invest on behalf of employees of the High-Yield Bond Department, to free them from investing so they might spend their time trading and selling for Drexel. In 1985 Henry Kravis, a partner in Kohlberg Kravis Robert (KKR), was involved in making a bid for Storer Communications, a Florida-based cable TV network. Drexel's revenue stream from trading and underwriting high-yield bonds declined substantially. The fraud networks were called into action when normal market mechanisms were not functioning in favor of Drexel.
