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Wednesday, February 27, 2013

Forbes: Dodgers Owner Being Investigated By SEC About Ties To Milken

The owners of the Los Angeles Dodgers are embroiled in an investigation by the Securities and Exchange Commission into whether Michael Milken has violated the terms of his lifetime ban on securities trading, according to an article in Fortune.

Milken has been a longtime client of the firm and at times has had as much as $800 million invested with Guggenheim, some of it in a hedge fund run by the firm’s president Boehly. His lifetime ban prohibits him from profiting from offering investment advice. The SEC is looking at whether Milken is violating that ban by effectively acting as a manager of Guggenheim investments beyond his own. Walter told Fortune: “Mike (Milken) doesn’t have an ownership or managerial role of any kind at Guggenheim. ”

Tripon Posted: February 27, 2013 at 12:34 PM | 44 comment(s) Login to Bookmark
  Tags: dodgers

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   1. The District Attorney Posted: February 27, 2013 at 12:57 PM (#4377010)
It doesn't seem possible that the Dodgers could have financial issues.
   2. RoyalsRetro (AG#1F) Posted: February 27, 2013 at 02:00 PM (#4377058)
Can't wait to hear Vin Scully plugging for Amway.
   3. Dan Lee is some pumkins Posted: February 27, 2013 at 02:21 PM (#4377077)
This is what happens when you let Crazy Guggenheim buy into MLB.
   4. Bitter Mouse Posted: February 27, 2013 at 02:49 PM (#4377102)
As a Giants fan I find this funny. I am a bad person.
   5. Red Menace Posted: February 27, 2013 at 03:04 PM (#4377120)
"Back in the 1980's I was the toast of Wall Street. I was having whiskey with Boesky and cookies with Milken."
   6. Jeff Frances the Mute Posted: February 27, 2013 at 04:02 PM (#4377173)
$800 million sounds like a lot until you see that Guggenheim has over $170 billion under management. Also, the Fortune article that this was sourced on says that the SEC investigation has been open for 2 years. So it appears that there is no evidence that Milken is actually involved with Guggenheim as more than an investor.
   7. Maury Brown Posted: February 27, 2013 at 04:06 PM (#4377180)
I like Mike. Colleague. But, he's been flogging Guggenheim while it's ironic that he's written favorably of Steve Cohen
   8. Walt Davis Posted: February 27, 2013 at 04:20 PM (#4377206)
Watch out! The SEC is on the case! Guggenheim must be shaking in their collective boots in fear of the awesome power of the SEC! Why, they might get hit with a $20,000 fine!

That Milken is still running around with at least $800 million tells you all you really need to know about the SEC.
   9. A big pile of nonsense (gef the talking mongoose) Posted: February 27, 2013 at 04:34 PM (#4377222)
he's been flogging Guggenheim


Not in public, I hope.
   10. depletion Posted: February 27, 2013 at 05:11 PM (#4377250)
That Milken is still running around with at least $800 million tells you all you really need to know about the SEC.

Thank you, Walt. Very true.
   11. Bob Tufts Posted: February 27, 2013 at 05:50 PM (#4377283)
Milken stole a few billion and gave back half and he's somehow a good guy....
   12. tfbg9 Posted: February 27, 2013 at 06:17 PM (#4377294)
Milken stole a few billion and gave back half and he's somehow a good guy....


He's against cancer!
   13. Gold Star - just Gold Star Posted: February 27, 2013 at 06:24 PM (#4377296)
Vin Scully almost never has guests in the booth during his broadcasts - yet every season, Milken makes an appearance.
   14. Steve Treder Posted: February 27, 2013 at 07:00 PM (#4377310)
Vin Scully almost never has guests in the booth during his broadcasts - yet every season, Milken makes an appearance.

He has to; it's an MLB thing.

It's bizarre, to say the least, that Milken serves as the very-public face for his foundation. I remember the first time I heard a broadcaster (Ted Robinson, I believe it was) fawning all over Milken in one of those in-game "interviews," I pretty much did a spit-take.
   15. tfbg9 Posted: February 27, 2013 at 08:00 PM (#4377326)
Yeah, Milken got what the great Robert Klein used to call "The Agnew Punishment." IOW, none to speak of.

Does he still wear the stupid suspenders?
   16. 'zop sympathizes with the wrong ####### people Posted: February 27, 2013 at 08:47 PM (#4377342)
The only thing Miliken was guilty of was being better at his job than anyone else was. And his innovations have greatly benefitted the economy and the public interest. Never understood why Miliken is a "criminal" and a IP-thief like Jobs gets his balls washed.
   17. Publius Publicola Posted: February 27, 2013 at 08:48 PM (#4377343)
He's against cancer!


But only against the kind he himself got and risks getting again.

You know, when Boesky (the workers in his office would call him "Piggy" behind in back in tribute to his all-consuming greed) and Milken and Kolberg/Kravitz/Roberts were doing their thing in the eighties, it was actually controversial. There was a lot of hand-wringing about he course the economy was going to take if this continued. Now, in retrospect, the hand-wringing was entirely justified but there doesn't seem to be much political movement to correct these excesses. I suppose its because the generation that experienced the Great Depression is mostly gone now and no longer a political force to contend with. Sometimes I think it would have been better for the country if we had to experience an economy with 25% unemployment.
   18. Steve Treder Posted: February 27, 2013 at 09:02 PM (#4377351)
Never understood why Miliken is a "criminal" and a IP-thief like Jobs gets his balls washed.

Perhaps the fault lies in your powers of understanding.

And perhaps as an example, it's "Milken."
   19. Ivan Grushenko of Hong Kong Posted: February 27, 2013 at 09:05 PM (#4377355)
Sometimes I think it would have been better for the country if we had to experience an economy with 25% unemployment.


Greece is already there. According to you they should be grateful.
   20. Ivan Grushenko of Hong Kong Posted: February 27, 2013 at 09:18 PM (#4377359)
[deleted]
   21. 'zop sympathizes with the wrong ####### people Posted: February 27, 2013 at 09:38 PM (#4377363)
Perhaps the fault lies in your powers of understanding.

And perhaps as an example, it's "Milken."


Oooh, you got me! I misspelled something in a post I dashed off in 5 seconds! The horror!

I do some lev fin work, so I think I understand exactly what he did. You're the clueless one.
   22. Never Give an Inge (Dave) Posted: February 27, 2013 at 09:59 PM (#4377372)

It would be interesting to ask most people what they think Milken actually went to prison for (both his defenders and detractors).
   23. valuearbitrageur Posted: February 27, 2013 at 10:37 PM (#4377391)
The only thing Miliken was guilty of was being better at his job than anyone else was. And his innovations have greatly benefitted the economy and the public interest. Never understood why Miliken is a "criminal" and a IP-thief like Jobs gets his balls washed.


I'd be more inclined to agree with you about Millken if you knew anything about the case, or Steve Jobs.

Jobs visit to Xerox PARC was granted in part in return for allowing Xerox to invest in Apple pre-IPO, and Apple directly signed a technology license with Xerox. In addition to that,

The Alto had no desktop and no finder. Apple created theirs first. The alto still relied on a command line interface for the OS and file commands.

The Alto didn't have overlapping windows because Xerox top engineers thought it near impossible to implement, especially on hardware of the day. Xerox engineers fell out of their chairs in disbelief when they saw Bill Atkinson had implemented overlapping windows on a lowly Motorola 68k with almost no memory. That single innovation led to directly to a far more useful and usable interface, including custom controls, etc.

Apple created a far more rigorous standardized set of graphical UI features and guidelines because the Lisa and the Mac, unlike the Alto, were true graphical computers, not a small set of graphical apps running over a command line operating system.

The Alto didn't have a menu bar, Apple created one to give applications a consistent commands interface, which made their apps easier to learn and use

The altos mouse was very limited, it was expensive and could only move either vertically or horizontally at one time. Steve Jobs helped design the Mac mouse, which used a ball to give unlimited range of motion.

Xerox eventually produced the Star, a computer that was far more graphical than the Alto, but also extremely expensive (over $10,000).

Apple built the Macintosh, in many ways as good as the Star, with the 68k and only 128k of RAM, and sold for only $2,000. They innovated heavily to build a video system that could support GUI graphics, and fit the underlying QuickDraw libraries in ROM. One key was the mouse Jobs helped design, which cost less tha $5 to make.

   24. 'zop sympathizes with the wrong ####### people Posted: February 28, 2013 at 12:17 AM (#4377445)
If you think that I was referring to Xerox, or that Apple's IP misappropriation stopped with the GUI, then you're dearly mistaken. If anything, Apple was its most brazen in stealing IP during the late years of Jobs's reign, with an enormous cash position to play attrition-war litigation against everyone else. Apple has kept the IP groups of a dozen firms busy ####### other companies out of their property.
   25. Jack Carter, calling Beleaguered Castle Posted: February 28, 2013 at 12:50 AM (#4377449)
Sometimes I think it would have been better for the country if we had to experience an economy with 25% unemployment.


You're assuming people learn from their mistakes?

The global economy nearly melted in 2008. The public push for real reform is all but non-existent. All you get with 25% unemployment are demagogues; not enlightenment.
   26. zenbitz Posted: February 28, 2013 at 01:46 AM (#4377468)
The Alto had no desktop and no finder. Apple created theirs first. The alto still relied on a command line interface for the OS and file commands.


The irony here being that I vastly prefer a (modern, OSX) mac to a windows machine BECAUSE it still has a command line UNIX interface if you want it.
   27. Publius Publicola Posted: February 28, 2013 at 08:49 AM (#4377489)
The global economy nearly melted in 2008. The public push for real reform is all but non-existent. All you get with 25% unemployment are demagogues; not enlightenment.


I don't think that's true. We got real reform in the 1930's and only the most reactionary capitalist would describe FDR as a demagogue. My parents generation was genuinely chastened by that experience.
   28. Bitter Mouse Posted: February 28, 2013 at 09:05 AM (#4377498)
Jobs was not a paragon, but was involved in some pretty innovative things (and crappy things).

Milken was not a paragon, but was involved in some pretty innovative things (and crappy things).

One was convvicted and went to jail.
   29. Rants Mulliniks Posted: February 28, 2013 at 09:18 AM (#4377505)
Good to see the SEC is hard at work protecting everyday Americans from Wall St. fraudsters.
   30. Slivers of Maranville descends into chaos (SdeB) Posted: February 28, 2013 at 09:59 AM (#4377525)

I don't think that's true. We got real reform in the 1930's


We also got Mussolini and Hitler. Not a good batting average. Look at Italy today -- everybody hates what the government is doing, but the only alternatives that have emerged are Berlusconi and Grilli.
   31. Bring Me the Head of Alfredo Griffin (Vlad) Posted: February 28, 2013 at 10:27 AM (#4377534)
the only alternatives that have emerged are Berlusconi and Grilli.


Grilli's not so bad. Not many world leaders can manage a 13+ K/9.
   32. Fernigal McGunnigle has become a merry hat Posted: February 28, 2013 at 12:16 PM (#4377602)
We also got Mussolini and Hitler. Not a good batting average. Look at Italy today -- everybody hates what the government is doing, but the only alternatives that have emerged are Berlusconi and Grilli.


Italy's problems go waaaay deeper than anything the US will be able to manage soon. You can easily argue that republican Italy has never had good government. They never dealt with the legacy of fascism, and this helped lead to a perpetually alienated left. So the right has always had fascist tendencies, and the communists were a major party of the left for most of the postwar period. The south is extremely corrupt and economically inept. The country is culturally disunited (the first census in which over 50% of the population listed Italian as their first language came in 1980). Lastly, and I say this as someone who loves Italy, a lot of their culture is really gross in ways that are ultimately self-defeating. Grilli is largely right -- their system needs to be entirely blown up. But he doesn't have any real idea of what to do next, and his rhetoric of revolution and "dead" politicians is dangerous.

Another thing is that Italy has huge grey and black markets. This means that the reality on the ground isn't as disastrous as the official economic numbers would seem to indicate. It means that the government's tax revenue is much less than it should be (with accompanying debt, etc. issues), but that day-to-day life isn't as bad as a macro view would suggest.
   33. Tulo's Fishy Mullet (mrams) Posted: February 28, 2013 at 12:30 PM (#4377612)
I don't think that's true. We got real reform in the 1930's and only the most reactionary capitalist would describe FDR as a demagogue. My parents generation was genuinely chastened by that experience


I work in this biz (on the registered side), and we all continue to be governed (open-end funds, closed-end funds, etfs) by the 3 major Acts from that time period (1933, '34, and '40 Acts) governing Securities, Advisers and Investment Companies. It is pretty remarkable to think that there hasn't been a serious overhaul of these Acts, the practice is so deeply embedded and intertwined, it is hard to imagine starting over.
   34. Crispix reaches boiling point with lackluster play Posted: February 28, 2013 at 12:38 PM (#4377618)
The government can't overhaul laws in this sort of industry, that would constitute "picking winners". The only winners who may be picked are those who are already winners in the status quo.
   35. valuearbitrageur Posted: February 28, 2013 at 02:31 PM (#4377730)
If you think that I was referring to Xerox, or that Apple's IP misappropriation stopped with the GUI, then you're dearly mistaken. If anything, Apple was its most brazen in stealing IP during the late years of Jobs's reign, with an enormous cash position to play attrition-war litigation against everyone else. Apple has kept the IP groups of a dozen firms busy ####### other companies out of their property.


Oh, you referring to our current patent law ###########, where everyone is suing everyone? What, are you one of the East Texas patent trolls suing the world for using obvious inventions that were around 20 years before you patented them?

And Apple stole what from Samsung? How to build a company with almost no intellectual property and limited design sense, that assembles devices that run other people's software containing all of the products IP? Don't get me wrong, Samsung is an amazing manufacturer, the best in the world, but the day they are first in a significant new market will be the first time ever. They were the first company to blatantly copy the iPod touch wheel over ten years ago, and since the have mostly preferred to focus on manufacturing excellence while cribbing design features from others.

And it's hard for Apple to misappropriate the GUI it was co-inventor of, since it had as much to do with the invention as Xerox.
   36. valuearbitrageur Posted: February 28, 2013 at 02:45 PM (#4377747)
You know, when Boesky (the workers in his office would call him "Piggy" behind in back in tribute to his all-consuming greed) and Milken and Kolberg/Kravitz/Roberts were doing their thing in the eighties, it was actually controversial. There was a lot of hand-wringing about he course the economy was going to take if this continued. Now, in retrospect, the hand-wringing was entirely justified but there doesn't seem to be much political movement to correct these excesses


Oh, but there were changes. The handwringing wasn't over insider trading, which has been around forever, and quite honestly should be legal since it makes the market more efficient, which would mostly benefit the general public investor.

The actual handwringing was over LBOs and "raiders". Enough changes have been effected that have made hostile takeovers almost extinct. To do this they've gutted shareholders of their rights and ability to change the board, entrenching board members and management, and leading to two decades of sky high CEO salaries.

Ahh, regulators and unintended consequences, a relationship so strong it's unlikely to ever suffer divorce.

The argument can be made that Milken did a great deal of good, and that LBOs were a necessary reaction to entrenched management of the 80s. It's a bit harder to argue Milken didn't cross the line, but easier to argue his crimes were minor and his punishment was excessive. Liver obviously is lacking the facts and skills to make those arguments, and I'm too busy to (and care less as Milken is obviously an ass).
   37. Publius Publicola Posted: February 28, 2013 at 04:50 PM (#4377860)
The actual handwringing was over LBOs and "raiders". Enough changes have been effected that have made hostile takeovers almost extinct. To do this they've gutted shareholders of their rights and ability to change the board, entrenching board members and management, and leading to two decades of sky high CEO salaries.


In the '80's, when everyone was hysterical that Japan was going to take over the corporate world, there was a lot of analysis done to figure out how to make US corporations and businesses more competitive. One of issues always brought up was the disparity between what an average CEO of a US corporation makes vs his Japanese counterpart. So I think your argument is spurious, since the problem with CEO compensation was present before the leveraged buyouts and raiders ran wild. And the trend since that time has been more de-regulation, not more regulation.
   38. Tulo's Fishy Mullet (mrams) Posted: February 28, 2013 at 05:15 PM (#4377889)
The government can't overhaul laws in this sort of industry, that would constitute "picking winners". The only winners who may be picked are those who are already winners in the status quo.


While that is true, that still doesn't mean the Government isn't picking winners now (beyond just status quo). (the mystery of the exemptive relief process is Exhibit A of this.).
   39. zenbitz Posted: February 28, 2013 at 05:22 PM (#4377899)
@38 I think @34 was sarcastic.

As for patents - all those look and feel & design patents are crap anyway (FLASHES UP THE RAY SIGN). You should not be able to patent style. In fact, in fashion you cannot (maybe you can in France?). You can patent devices, code, chip designs, instruction sets. But whether or not my phone has rounded corners of a certain radius? Whether or not touching a screen is a switch?

Dumb - As dumb as patenting gene sequences (which is probably still done, but no one knows whether or not they are valid because no one will pay enough lawyers to risk taking it to court)
   40. valuearbitrageur Posted: February 28, 2013 at 06:04 PM (#4377953)
As for patents - all those look and feel & design patents are crap anyway (FLASHES UP THE RAY SIGN). You should not be able to patent style. In fact, in fashion you cannot (maybe you can in France?). You can patent devices, code, chip designs, instruction sets. But whether or not my phone has rounded corners of a certain radius? Whether or not touching a screen is a switch?


You are confusing copyrights and patents. And I don't agree with you, I think you shouldn't be able to patent ANYTHING, or copyright any design style. Patents were created to benefit society, not the inventor. The inventor was given the patent as compensation to ensure they shared their invention with the world, instead of hiding it behind the doors of their secret manufacturing facility. The problem is that society no longer benefits from patents, even few legitimate inventors do nowadays, it's mostly trolls patenting obvious stuff and relying on the circuit court of East Texas and our expensive legal system to force victims to pay them off rather than defend your rights.

If we must have patents, they should be freely licensable at a reasonable cost and their license should be set by an independent panel based on each patents contribution to the overall value of the product. Then the patent system will start to serve society, instead of greedy lawyers.
   41. valuearbitrageur Posted: February 28, 2013 at 06:17 PM (#4377964)
In the '80's, when everyone was hysterical that Japan was going to take over the corporate world, there was a lot of analysis done to figure out how to make US corporations and businesses more competitive. One of issues always brought up was the disparity between what an average CEO of a US corporation makes vs his Japanese counterpart. So I think your argument is spurious, since the problem with CEO compensation was present before the leveraged buyouts and raiders ran wild. And the trend since that time has been more de-regulation, not more regulation.


Nope. First of all, the CEO pay comparison studies have always been flawed from the get go. A CEO makes as much as 50 workers, as much as 200 workers, as much as 500 workers, etc? Meaningless unless you at least adjust for the size of the business. Public companies are larger in the US than Japan, and are larger now than they were in the 1950s, and the CEO to worker ratio is meaningless when it should range widely depending on the business itself. Steve Jobs was worth far more than 1000 Apple employees, it could easily have gone bankrupt under another CEO (and was on it's way to doing so). I'm sure there are businesses where the CEO's influence is much less important due to the strength of it's market barriers, and limits on the size of it's market opportunity.

Secondly, you didn't comprehend what I wrote. Cronyism started the CEO pay spiral well before the 1980s, it was the 1980s (right when the Japan comparison was made) that it finally got bad enough it created an arbitrage opportunity for corporate raiding. Corporate raiding was big for only part of the decade, then regulatory and legal barriers caught up and put raiders out of business.

The Raiding arbitrage only worked where they could profitably buy the company for less than it's breakup value to pay for their purchase (or occasionally roll up their sleeves and fix it, but let's be honest, arbitrageurs are rarely good businessmen). There has to be a significant gap in value and current price for that strategy to be worth the risk that your value analysis is wrong, or it takes longer than you thought, and every uncertainty and cost that thrown up as a barrier increases to the margin of safety you need to pursue the strategy and makes it harder to find opportunities to do so.

Public company CEOS are certainly worth far more than the Union think tanks that fund the overpaid CEO PR studies think, but far less than the CEOs think, i.e. are making today.
   42. Publius Publicola Posted: February 28, 2013 at 07:07 PM (#4377985)
Public companies are larger in the US than Japan,


??? Japanese corporations are huge, sprawling conglomerates. You must be thinking of Germany.

Steve Jobs was worth far more than 1000 Apple employees, it could easily have gone bankrupt under another CEO (and was on it's way to doing so).


What about Rick Wagoner? He made $15M, and another $20M in severance, in 2008 for running GM into a drainage ditch to the tune of a $30.9B(!) loss. Heck, they could have paid some shlub $50K to do the same thing, with 2 weeks severance.
   43. You Know Nothing JT Snow (YR) Posted: February 28, 2013 at 07:14 PM (#4377989)
Public companies are larger in the US than Japan,

??? Japanese corporations are huge, sprawling conglomerates.


Well Japanese people are tiny. They're wee fellas next to us Americans, that should count for something.

What about Rick Wagoner? He made $15M, and another $20M in severance, in 2008 for running GM into a drainage ditch to the tune of a $30.9B(!) loss. Heck, they could have paid some shlub $50K to do the same thing, with 2 weeks severance.


I'll know these boards are serious about delivering value to shareholders when they outsource the CEO position to a businessman in India for $250,000.
   44. Swedish Chef Posted: February 28, 2013 at 07:24 PM (#4377994)
A Japanese corporation is something that could never work outside of Japan and is not a model to emulate for the rest of the world. It's bad enough to work for their overseas subsidiaries when one is shielded from most of the absurdity.

EDIT: Also, any Japanese CEO worth his salt will have a very lavish expense account, he's not going to have to pay for his mistress or his ride out of his own pocket.

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