[ by Howard Haykin ]

The SEC thinks Michael Milken, the one-time securities magnate who popularized junk bonds in the 1980s, might have violated his lifetime ban from the securities industry.  MIlken, , whose high-yield debt business earned him the title of the "junk bond king" - as well as significant fame and fortune - was barred from the securities industry after serving time in prison for fraud.  He since has taken up philanthropy on a full time basis, although he is permitted to manage his own money - but may not act as an investment adviser or broker.

On Wednesday, Fortune magazine reported that Mr. Milken may have crossed the line by effectively acting as a manager of Guggenheim Partners, a financial services firm. The regulator reportedly is now investigating a number of transactions, including a joint investment by Milken and Guggenheim in an energy company called Milagro, which helped it buy Petrohawk Energy's Gulf Coast operations for $825 million in 2007.  The key element in for SEC investigators to determine whether Milken is managing investments beyond his own through his relationship with Guggenheim.  

A spokesperson for the SEC declined to comment on the investigation, while Guggenheim's media team was unavailable.  Fortune, however, included a quote from Guggenheim CEO Mark Walter, who said Milken does not have an ownership or managerial role of any kind at the firm.  Milken's office responded to request by Reuters for comment by referring to a statement given to Fortune that said the 66-year-old has spent time over the past 20 years on investments of his own and for his family, which involves working with investment advisers and money managers.   [Reuters, 2/27/13]