Milkin's Plea Bargain

MICHAEL MILKIN is, as we now know by his own admission, a criminal. Pleading guilty last week to six felony counts stemming from his securities manipulations as one of America's highest-rolling financiers, the one-time ``junk bond king'' confessed to fraudulent stock transactions that he knew to be illegal at the time. The crimes Mr. Milkin acknowledged may be only a sliver of his illegal conduct when he headed the high-yield bond department at now-defunct Drexel Burnham Lambert. The government had confronted Milkin with a 98-count indictment, and was considering additional charges when he decided to plea bargain.

Even with the huge financial penalty Milkin agreed to - a $200 million fine plus another $400 million to reimburse defrauded investors - and the virtual certainty of a jail term, some critics think he got off easy. They note that one year alone Milkin made more than half a billion dollars at Drexel; they also worry that the plea bargain will keep aspects of the case from coming to light.

But the Justice Department and the SEC - no patsies in their assault on Wall Street greed - evidently concluded that there was more to be gained by bargaining with Milkin now for his cooperation in continuing investigations of market fraud than by proceeding in the complex and painstaking prosecution. It's hard to second guess that judgment.

Will Milkin be remembered as a financial genius whose major innovation helped smaller companies raise money and create jobs, or as a slick operator whose major innovation helped fuel some of the grossest financial excesses of recent times - and was a crook to boot? Properly, both. The greed and hubris that finally overtook Milkin shouldn't obscure his contribution, but that contribution in no way excuses the flaws that hurt investors and ultimately led to his disgrace.

Wall Street of the '80s is neatly summed up in the two sides of Michael Milkin.