The Drexel headquarters (right) on Wall Street in New York City
Company type
Private
Traded as
NYSE: DBL
DJIA component
S&P 100 component
S&P 500 component
Industry
Financial services
Founded
1935
Founder
I. W. "Tubby" Burnham
Defunct
1994
Fate
Forced into bankruptcy
Headquarters
60 Broad Street, New York, New York, United States
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]
Net income
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]
^ abcdeCite error: The named reference April Fools was 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 HC was 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.
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Global Information
US$4.8 billion (1986)[1]