40°42′19″N 74°00′43″W / 40.70536°N 74.01198°W
 | |
 The Drexel headquarters (right) on Wall Street in New York City | |
| Company type | Private |
|---|---|
| Industry | Financial services |
| Founded | 1935 |
| Founder | I. W. "Tubby" Burnham |
| Defunct | 1994 |
| Fate | Forced into bankruptcy |
| Headquarters | 60 Broad Street, New York City, US |
Key people | Fred Joseph (president and CEO) Michael Milken (head of high-yield securities) |
| Products | Investment banking Investment management |
| Revenue |  US$4.8 billion (1986)[1] |
| US$545.5 million (1986)[1] | |
| Total assets | US$35.9 billion (1986)[1] |
Number of employees | 10,000 (1986)[1] |
Drexel Burnham Lambert Inc. was an American multinational investment bank that was forced into bankruptcy in 1990 due to its involvement in illegal activities in the junk bond market, driven by senior executive Michael Milken. At its height, it was a Bulge Bracket bank, as the fifth-largest investment bank in the United States.[2]
The firm had its most profitable fiscal year in 1986, netting $545.5 million, which represented the most profitable year ever for a Wall Street firm at the time, equivalent to $1.29 billion in 2023. Milken, who was Drexel's head of high-yield securities, was paid $295 million, the highest salary that an employee in the modern history of the world had ever received.[1][3][4][5] Even so, Milken deemed his salary to be insufficient for his contributions to the bank, and received $550 million the next fiscal year.[6]
The firm's aggressive culture led many Drexel employees to stray into unethical, and sometimes illegal, conduct. Milken and his colleagues at the high-yield bond department believed the securities laws hindered the free flow of trade. Eventually, Drexel's excessive ambition led it to abuse the junk bond market and become involved in insider trading. In February 1990, Drexel was forced into Chapter 11 bankruptcy to avoid being seized by the Securities and Exchange Commission. It was the first Wall Street firm to be forced into bankruptcy since the Great Depression.
Drexel "fueled many of the biggest corporate takeovers of the 1980s."[7]
- ^ a b c d e Cite error: The named reference
April Foolswas invoked but never defined (see the help page). - ^ "Your Best Job | MoreBusiness.com". Archived from the original on August 12, 2007. Retrieved August 22, 2007.
- ^ Cite error: The named reference
HCwas invoked but never defined (see the help page). - ^ Cohan, William D. "Michael Milken invented the modern junk bond, went to prison, and then became one of the most respected people on Wall Street". Business Insider. Retrieved June 25, 2021.
- ^ Eichenwald, Kurt (April 3, 1989). "Wages Even Wall St. Can't Stomach". The New York Times. Archived from the original on February 4, 2017. Retrieved February 11, 2017.
Surely no one in American history has earned anywhere near as much in a year as Mr. Milken.
- ^ Silverman, Gary (February 21, 2020). "Michael Milken, junk bond king wins pardon at last". Financial Times. Retrieved January 20, 2023.
- ^ "The Collapse of Drexel Burnham Lambert". The New York Times. February 14, 1990.