Michael Milken
Born	Michael Robert Milken (1946-07-04) July 4, 1946 (age 65) Encino, California, U.S.
Conviction(s)	Securities fraud
Penalty	2 years in Federal prison, $200 million in fines, $400 million in restitution
Status	released January 1993[1]
Occupation	Entrepreneur, financier, philanthropist

Michael Robert Milken (born July 4, 1946) is an American business magnate, financier, and philanthropist noted for his role in the development of the market for high-yield bonds (also called junk bonds) during the 1970s and 1980s, for his 1990 guilty plea to felony charges for violating US securities laws, and for his funding of medical research.^[2]

Milken was indicted on 98 counts of racketeering and securities fraud in 1989 as the result of an insider trading investigation. After a plea bargain, he pled guilty to six securities and reporting violations but was never convicted of racketeering or insider trading. Milken was sentenced to ten years in prison and permanently barred from the securities industry by the Securities and Exchange Commission. After the presiding judge reduced his sentence for cooperating with testimony against his former colleagues and good behavior, he was released after less than two years.^[3]

His critics cited him as the epitome of Wall Street greed during the 1980s, and nicknamed him the "Junk Bond King". Supporters, like George Gilder in his book, Telecosm, note that "Milken was a key source of the organizational changes that have impelled economic growth over the last twenty years. Most striking was the productivity surge in capital, as Milken … and others took the vast sums trapped in old-line businesses and put them back into the markets."

Milken has also been engaged in philanthropic activities since the early 1980s. He is co-founder of the Milken Family Foundation, chairman of the Milken Institute, and founder of medical philanthropies funding research into melanoma, cancer and other life-threatening diseases. In a November 2004 cover article, Fortune magazine called him "The Man Who Changed Medicine" for his positive influence on medical research.^[2]

Milken's compensation, while head of the high-yield bond department at Drexel Burnham Lambert in the late 1980s, exceeded $1 billion in a four-year period, a new record for US income at that time.^[4] Drexel went bankrupt in 1990. With an estimated net worth of around $2 billion as of 2010, he is ranked by Forbes magazine as the 488th richest person in the world.^[5] Much of that wealth comes from his success as a bond trader; he only had four losing months in 17 years of trading.^[6]

Education[link]

Milken was born to a Jewish family in Encino, California.^[7] He graduated from Birmingham High School, where his classmates included actresses Sally Field and Cindy Williams.

Milken is a 1968 University of California, Berkeley graduate with a B.S. with highest honors, was elected to Phi Beta Kappa and was a member of the Sigma Alpha Mu fraternity.^[8] He received his MBA from the Wharton School at the University of Pennsylvania.

While at Wharton, Milken was influenced by credit studies authored by W. Braddock Hickman, a former president of the Federal Reserve Bank of Cleveland, who noted that a portfolio of non-investment grade bonds offered "risk-adjusted" returns greater than that of an investment grade portfolio.

Career[link]

Through his Wharton professors, Milken landed a summer job at Drexel Harriman Ripley, an old-line investment bank, in 1969. After completing his MBA, he joined Drexel (by then known as Drexel Firestone) as director of low-grade bond research. He was also given some capital and permitted to trade. According to legend, he was so devoted to his work that he wore a miner's headlamp while commuting on the bus so that he could read company prospectuses.

Drexel merged with Burnham and Company in 1973 to form Drexel Burnham. Despite the firm's name, Burnham was the nominal survivor; the Drexel name only came first at the insistence of the more powerful investment banks, whose blessing was necessary for the merged firm to inherit Drexel's position as a "major" firm. Milken was one of the few prominent holdovers from the Drexel side of the merger. He persuaded his new boss, Tubby Burnham (a fellow Wharton alumnus), to let him start a high-yield bond trading department—an operation that soon earned a remarkable 100% return on investment.^[6] By 1976, Milken's income at what was now Drexel Burnham Lambert was estimated at $5 million a year.

One weekend in 1978, Milken moved the high-yield bond operation to Century City in Los Angeles. The transition went so smoothly that many clients were unaware that the department had moved between Friday and Monday. Later, the operation moved to Beverly Hills at 9560 Wilshire Boulevard. On the fourth floor, he set up an X-shaped trading desk—designed to maximize his contact with traders and salesmen—from which he worked very long hours, invariably starting his day before 5 am Pacific (8 am Eastern, prior to the opening of the markets in New York). The department grew and, in 1986-87, moved up to the fifth floor, where there were eventually three of the famous X-shaped trading desks.

High-yield bonds and leveraged buyouts[link]

By the mid-1980s, Milken's network of high-yield bond buyers (notably Fred Carr's Executive Life Insurance Company and Tom Spiegel's Columbia Savings & Loan) had reached a size which enabled him to raise large amounts of money very quickly. It was said, for example, that Milken raised $1 billion for MCI Communications, then an upstart provider of long-distance telephone services, in the space of one hour on the telephone. Cable TV companies, like John Malone's Tele-Communications Inc., were also favorite clients, as were Ted Turner's maverick Turner Broadcasting, cellphone pioneer Craig McCaw, and casino entrepreneur Steve Wynn. Before long, the CEOs and CFOs of many smaller and mid-sized companies previously limited to the slow and expensive private-placement market were making early-morning pilgrimages to Beverly Hills seeking to issue high-yield and/or convertible bonds through Drexel Burnham. Without question, many leading entrepreneurs of the 1980s owe their success at least partly to Milken's perception of this market opportunity. One of his favorite sayings: "There is no shortage of capital; there is only a shortage of management talent."

Milken was largely involved with kick-starting investments in Nevada, which for many years was the fastest-growing state in the U.S. Milken funded the gaming industry, newspapers and homebuilders; among the companies he financed were MGM Mirage, Mandalay Resorts, Harrah's Entertainment and Park Place.

This money-raising ability also facilitated the activities of leveraged buyout (LBO) firms such as Kohlberg Kravis Roberts and of so-called "greenmailers". Armed with a "highly confident letter" from Drexel (in which Drexel promised to get the necessary debt in time to fulfill the buyer's obligations), these firms and greenmailers were able to profit by merely threatening LBOs of large, blue-chip companies in which they had built up equity positions. Milken's task was perhaps made easier by the fact that the top-tier Wall Street investment banks were unwilling to compete with him for fear of jeopardizing their longstanding and lucrative relationships with many of the blue-chip companies who were potentially his targets, although companies such as Salomon Brothers, Morgan Stanley, and First Boston later entered the high-yield market. Drexel financed notable buyouts of companies previously thought invulnerable, including Beatrice Companies and the cosmetics firm Revlon.

Amongst his significant detractors have been Martin Fridson formerly of Merrill Lynch and author Ben Stein. Milken's high-yield "pioneer" status has proved dubious as studies show "original issue" high-yield issues were common during and after the Great Depression. Others such as Stanford Phelps, an early co-associate and rival at Drexel, have also contested his credit as pioneering the modern high-yield market. This is, however, quibbling, as Drexel was for all intents and purposes unchallenged as essentially the only underwriter and trader of high-yield bonds throughout almost the entire decade of the 1980s.

Despite his influence in the financial world (at least one source called him the most powerful American financier since J.P. Morgan),^[9] Milken was an intensely private man who shunned publicity. Citing the power behind the most aggressive firm on Wall Street, Drexel bankers often used "Michael says ..." to justify their tactics.^[6]

Later career[link]

Milken and his brother Lowell founded Knowledge Universe in 1996, the parent company of KinderCare Learning Centers. He is currently chairman of the company.^[10]

Scandal[link]

Dan Stone, a former Drexel executive, wrote in his book April Fools that Milken was under nearly-constant scrutiny from the Securities and Exchange Commission from 1979 onward due to unethical and sometimes illegal behavior in the high-yield department.^[9] His own role in such behavior has been much debated. Stone claims that Milken viewed the securities laws, rules and regulations with a degree of contempt, feeling they hindered the free flow of trade. However, Stone said that while Milken condoned questionable and illegal acts by his colleagues, Milken himself personally followed the rules.^[9] He often called Drexel's president and CEO, Fred Joseph—known for his strict view of the securities laws—with ethical questions.^[6] On the other hand, several of the sources James B. Stewart used for Den of Thieves told him that Milken often tried to get a higher markup on trades than was permitted at the time.

Harvey A. Silverglate, a prominent defense attorney who represented Milken during the appellate process, disputes that view in his book Three Felonies a Day: “Milken’s biggest problem was that some of his most ingenious but entirely lawful maneuvers were viewed, by those who initially did not understand them, as felonious, precisely because they were novel – and often extremely profitable.”^[11]

Ivan Boesky and an intensifying investigation[link]

The SEC inquiries never got beyond the investigation phase until 1986, when arbitrageur Ivan Boesky pled guilty to securities fraud as part of a larger insider trading investigation. As part of his plea, Boesky purported to implicate Milken in several illegal transactions, including insider trading, stock manipulation, fraud and stock parking (buying stocks for the benefit of another). This led to an SEC probe of Drexel, as well as a separate criminal probe by Rudy Giuliani, then United States Attorney for the Southern District of New York. Although both investigations were almost entirely focused on Milken's department, Milken refused to talk with Drexel (which launched its own internal investigation) except through his lawyers.^[6][9]

For two years, Drexel insisted that nothing illegal occurred, even when the SEC formally sued Drexel in 1988. Later that year, Giuliani began seriously considering an indictment of Drexel under the powerful Racketeer Influenced and Corrupt Organizations Act, which he had previously used against organized crime. Drexel management immediately began plea bargain talks, concluding that no financial institution could survive a RICO indictment. However, talks collapsed on December 19 when Giuliani made several demands that Drexel found too harsh, including one that Milken leave the firm if indicted.^[9]

Only a day later, however, Drexel lawyers discovered suspicious activity in one of the limited partnerships Milken set up to allow members of his department to make their own investments. That entity, MacPherson Partners, had acquired several warrants for the stock of Storer Broadcasting in 1985. At the time, Kohlberg Kravis Roberts was in the midst of a leveraged buyout of Storer, and Drexel was lead underwriter for the bonds being issued. One of Drexel's other clients bought several Storer warrants and sold them back to the high-yield bond department. The department in turn sold them to MacPherson. This partnership included Milken, other Drexel executives, and a few Drexel customers. However, it also included several managers of money funds who had worked with Milken in the past. It appeared that the money managers bought the warrants for themselves and didn't offer the same opportunity to the funds they managed.^[9] Some of Milken's children also got warrants, according to Stewart, raising the appearance of Milken self-dealing.

However, the warrants to money managers were especially problematic. At the very least, Milken's actions were a serious breach of Drexel's internal regulations, and the money managers had breached their fiduciary duty to their clients. At worst, the warrants could have been construed as bribes to the money managers to influence decisions they made for their funds (and indeed, several money managers were eventually convicted on bribery charges). The discovery of MacPherson Partners—whose very existence had not been known to the public at the time—seriously eroded Milken's credibility with the board. On December 21, 1988, Drexel pleaded nolo contendere to six counts of stock parking and stock manipulation, and agreed that Milken had to leave the firm if indicted.^[6][9]

Indictment and sentencing[link]

In March 1989, a federal grand jury indicted Milken on 98 counts of racketeering and fraud. The indictment accused Milken of a litany of misconduct, including insider trading, stock parking (concealing the real owner of a stock), tax evasion and numerous instances of repayment of illicit profits. The most intriguing charge was that Boesky paid Drexel $5.3 million in 1986 for Milken's share of profits from illegal trading. This payment was represented as a consulting fee to Drexel. Shortly afterward, Milken resigned from Drexel and formed his own firm, International Capital Access Group.^[6][9]

This was one of the first times RICO was used against an individual with no ties to organized crime. Milken originally planned to fight the charges against him, even though he risked spending the rest of his life in prison if convicted. He hired one of Ronald Reagan's former campaign aides, Linda Goodson Robinson (the wife of American Express president James Robinson) to launch a public relations campaign prior to the trial. Milken and other Drexel figures hired Edward Bennett Williams as their attorney. Williams was well known for representing Watergate figures as well as major Mafia figures including Frank Costello. After Williams died of cancer, Milken's handlers hired various other attorneys and his case became more difficult.

On April 24, 1990, Milken pleaded guilty to six counts of securities and tax violations.^[5] Three of them involved dealings with Ivan Boesky to conceal the real owner of a stock.^[11]

• Aiding and abetting another person's failure to file an accurate 13d statement with the SEC, since the schedule was not amended to reflect an understanding that any loss would be made up.
• Sending confirmation slips through the mail that failed to disclose that a commission was included in the price.
• Aiding and abetting another in filing inaccurate broker-dealer reports with the SEC.

Two other counts were related to tax evasion in transactions Milken carried out for a client of the firm, David Solomon, a fund manager.^[11]

• Selling stock without disclosure of an understanding that the purchaser would not lose money.
• Agreeing to sell securities to a customer and to buy those securities back at a real loss to the customer, but with an understanding that he would try to find a future profitable transaction to make up for any losses.

The last count was for conspiracy to commit these five violations.

The estimated injury for all counts combined was, by the judge's account, $318,000 and by the U.S. Probation Office's account $685,000.^[12]

As part of his plea, Milken agreed to pay $200 million in fines. At the same time, he agreed to a settlement with the SEC in which he paid $400 million to investors who had been hurt by his actions. He also accepted a lifetime ban from any involvement in the securities industry. In a related civil lawsuit against Drexel he agreed to pay $500 million to Drexel's investors.^[13][14] In total this means that he paid $1.1 billion for all lawsuits related to his actions while working at Drexel.

Critics of the government charge that the government indicted Milken's brother Lowell in order to put pressure on Milken to settle, a tactic condemned as unethical by some legal scholars. "I am troubled by - and other scholars are troubled by - the notion of putting relatives on the bargaining table," said Vivian Berger, a professor at Columbia University Law School, in a 1990 interview with the New York Times.^[15] As part of the deal, the case against Lowell was dropped. Federal investigators also questioned some of Milken's relatives—including his aging grandfather—about their investments.^[6]

At Milken's sentencing, Judge Kimba Wood told him:

You were willing to commit only crimes that were unlikely to be detected.... When a man of your power in the financial world... repeatedly conspires to violate, and violates, securities and tax business in order to achieve more power and wealth for himself... a significant prison term is required.^[16]

Milken's sentence was later reduced to two years from ten; he served 22 months.^[1]

Philanthropic activities[link]

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In 1982, Milken and his brother Lowell founded the Milken Family Foundation to support medical research and education. Through the Milken Educator Awards (founded in 1985), the MFF has awarded a total of more than $60 million to more than 2,500 teachers. Among the other initiatives of the Milken Family Foundation are the:

• Milken Institute, a non-profit, non-partisan economic think tank whose scholars publish research papers and conduct conferences on global and regional economies, human capital, demographics and capital markets. Each spring, the Institute hosts a Global Conference in Los Angeles;
• Milken Scholars, a program that provides outstanding high school graduates with a commitment of four years of college financial assistance, counseling, volunteer opportunities and preparation for graduate studies;
• TAP: The System for Teacher and Student Advancement, a comprehensive research-based strategy to attract, develop, motivate and retain high-quality teachers for America's schools;
• Mike's Math Club, a curriculum enrichment program that shows students in inner-city elementary schools that math is not only useful, but entertaining;
• Festival for Youth, a school-based community service program that engages students in yearlong service projects to help build vibrant communities; and the
• Milken Family Foundation Epilepsy Research Awards Program, which funds research to understand and conquer epilepsy.

Upon his release from prison in 1993, Milken founded the Prostate Cancer Foundation for prostate cancer research. Milken himself was diagnosed with advanced prostate cancer in the same month he was released. His cancer is currently in remission. The Prostate Cancer Foundation works closely with Major League Baseball through its Home Run Challenge program to promote awareness of prostate cancer and raise money for medical research. Each season in the weeks leading up to Father's Day, Milken visits many ballparks and appears on TV and radio broadcasts during the games.

In 2003, Milken launched a Washington, D.C.-based think tank called FasterCures, which seeks greater efficiency in researching all serious diseases. A key initiative of FasterCures is Biobank Central, which is advancing life sciences research in areas as diverse as autism, psoriasis and breast cancer.

The Melanoma Research Alliance (MRA) was launched in 2007 to support innovative translational studies that advance the diagnosis, staging and treatment of melanoma, the deadliest skin cancer.

Fortune magazine called Milken "The Man Who Changed Medicine" in a 2004 cover story on his philanthropy.^[2]

Notes and references[link]

Further reading[link]

• Connie Bruck - The Predators' Ball: the inside story of Drexel Burnham and the rise of the junk bond raiders, New York: American Lawyer/Simon and Schuster, 1988, Penguin paperback (updated), 1989.
• Fenton Bailey - "Fall From Grace: The Untold Story of Michael Milken", Carol Publishing Corporation (October 1992), ISBN 1-55972-135-9.
• James B. Stewart - Den of Thieves, New York: Simon & Schuster, 1991, (ISBN 0-671-63802-5).
• Ben Stein - A License to Steal: the Untold Story of Michael Milken and the Conspiracy to Bilk the Nation, Simon and Schuster, 1992
• Daniel R. Fischel - Payback: the conspiracy to destroy Michael Milken and his financial revolution, New York, New York: HarperBusiness, 1995, (ISBN 0-88730-757-4).
• Robert Sobel - Dangerous Dreamers: The Financial Innovators from Charles Merrill to Michael Milken' (1993), (ISBN 0-471-57734-0).
• Michael Lewis. (1989). Liar's Poker: Rising through the Wreckage on Wall Street. New York: W.W. Norton. ISBN 0-393-02750-3. 

v t e Private equity and venture capital investors Investment strategy Buyout · Venture · Growth · Mezzanine · Secondaries History History of private equity and venture capital · Early history of private equity · Private equity in the 1980s · Private equity in the 1990s · Private equity in the 2000s Investor types Private equity investors · Venture capitalists · Corporate raiders

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Lowell Milken is co-founder of Knowledge Universe, the largest early childhood education provider (ECE) in the world, founder of the TAP System for Teacher and Student Advancement, co-founder and chairman of the Milken Family Foundation,^[3] and a former senior vice president in the junk bond trading operation of Drexel Burnham Lambert,^[4] and the younger brother of Michael Milken.

Over the past three decades, Lowell Milken has founded additional nonprofit organizations, including the Lowell Milken Family Foundation and the Lowell Milken Center. In 2000, Lowell Milken was named one of America’s most generous philanthropists by Worth Magazine.^[5]

Life and Business Career[link]

Early life[link]

Lowell Milken was born in Los Angeles to Bernard and Ferne Milken and grew up in the San Fernando Valley.^[6] He attended Hesby Elementary School in Encino, Portola Junior High School in Tarzana and Birmingham High School in Van Nuys.^[7]

Education[link]

Lowell Milken graduated Phi Beta Kappa and with highest honors from the University of California, Berkeley. He earned a law degree from the University of California, Los Angeles, with distinctions of Order of the Coif and UCLA Law Review. He graduated in the top ten percent of his law school class.^[8]

Business career[link]

1973-1978[link]

After graduating from UCLA Law, Lowell joined the law firm of Irell & Manella in the fall of 1973 as an associate and specialized in business and tax law in the Los Angeles-based office for four years.^[8]

1979-1991[link]

In 1979, Lowell joined Drexel Burnham Lambert’s High Yield and Convertible Bond Department, known also as “junk bond” department and served as a departmental senior vice president until he resigned in 1989. His duties were reported to be “mostly administrative,” but he also provided financial analysis of companies for Drexel.^[9] He was not a registered representative with any securities exchange.

In March 1989, resulting from a long investigation of Lowell’s brother Michael Milken, which charged him with racketeering and a "long list of mail, wire and securities frauds," the government issued a 98-count indictment of Michael Milken that also named Lowell in two charges of racketeering and 11 counts of fraud.^[10] Michael Milken, in a plea bargain deal, pled guilty and went to prison. As part of that deal, the Government dropped charges against Lowell Milken.^[11] In March 1991, he was barred from working in the securities industry as part of a settlement with the Securities and Exchange Commission.

Critics have surmised that the government indicted Lowell in order to put pressure on Michael Milken to settle, a tactic condemned as unethical by some legal scholars. "I am troubled by - and other scholars are troubled by - the notion of putting relatives on the bargaining table," said Vivian Berger, a professor at Columbia University Law School, in a 1990 interview with the New York Times.^[12] As part of the deal, the case against Lowell was dropped. In 1990 articles in the Los Angeles Times and The New York Times, Lowell was characterized an “unassuming family man” being used as a “bargaining chip,” ^[13] indicted only to put pressure on his brother.^[14]

Though never a member of either organization, Lowell was barred from working in the securities industry as part of a settlement with the Securities and Exchange Commission in March 1991 and barred from membership on the NYSE and from employment or association with any NYSE member or member organization.^[15][16] During this period, Lowell continued his longstanding and concurrent work at the Milken Family Foundation and the Lowell Milken Family Foundation.

1991-Present[link]

After years in the planning stages, in 1996, Lowell co-founded Knowledge Universe with Michael Milken and Larry Ellison.^[17] In 2003, Lowell Milken and Michael Milken became the sole owners of the company. In the United States, Knowledge Universe is the largest early childhood education company and operates under the KinderCare® Learning Centers, Knowledge Beginnings®, CCLC®, The Grove School®, Champions® and Cambridge Schools™ brand.^[18] Internationally, Knowledge Universe oversees early childhood education, K-12 education and post-secondary education programs and is headquartered in Singapore. Lowell continues to serve as vice chairman of Knowledge Universe Education and he is Chairman of Knowledge Universe Education Holdings Inc.^[19]

Philanthropy[link]

Milken Family Foundation[link]

Lowell Milken is co-founder and chairman of the Milken Family Foundation.

Milken Educator Awards[link]

First presented by Lowell Milken in 1987, the Milken Educator Awards program works with state departments of education to identify teachers, principals and education specialists who are improving student achievement, making significant contributions to a school's level of excellence and elevating the teaching profession.^[20] The recipients of the Awards have no knowledge they will receive the Awards educators until the day the Award is presented. The Award carries a unrestricted financial prize of $25,000. Teacher magazine terms coined the phrase “Oscars of Teaching” when referring to the program.^[21] Since 1987, the Milken Educator Awards has given $62 million to roughly 2,500 educators.^[22]

TAP: The System for Teacher and Student Advancement[link]

In 1999, Lowell Milken founded the TAP System for Teacher and Student Advancement. TAP is a comprehensive school reform currently impacting more than 20,000 educators and 200,000 students.^[23] The TAP system is based on four integrated and aligned elements: Multiple careers paths, continuous school-based professional development, instructionally-focused teacher evaluation, and performance-based compensation for educators.^[24] In 2005, Lowell founded an independent public charity to support and manage the TAP System, The National Institute for Excellence in Teaching (NIET)^[25], and has since served as its Chairman.^[26]

Lowell Milken Center[link]

The Lowell Milken Center was established by Lowell Milken in 2007 in partnership with Kansas Milken Educator Norman Conard. The public nonprofit organization discovers, develops and communicates the stories of unsung heroes who have made a profound and positive difference on the course of history.^[27]

Milken Archive of Jewish Music[link]

In 1990, Lowell Milken founded the Milken Archive of Jewish Music, a project to preserve music of the American Jewish experience.^[28]

Lowell Milken Prostate Cancer Foundation Young Investigator Award[link]

Lowell Milken has partnered with the Prostate Cancer Foundation to present the Lowell Milken Prostate Cancer Foundation Young Investigator Award^[29] to scientists for work in the field of prostate cancer.

Lowell Milken Family Foundation[link]

Lowell Milken established the Lowell Milken Family Foundation in 1986 to support and provide funding for organizations and initiatives that strengthen communities through education and life-long learning.^[30]

Awards[link]

Lowell was honored as UCLA Law 2009 Alumnus of the year for his accomplishments in public and community service, particularly in the area of education and school reform.^[31] In 2009, Hebrew Union College presented Lowell with a Doctor of Humane Letters, honoris causa, in Los Angeles. In 2004, Lowell was honored by the Jewish Theological Seminary of America during the event "Only in America: Jewish Music in a Land of Freedom."^[32] In 2000, Lowell Milken was named one of America’s most generous philanthropists by Worth Magazine. Lowell Milken's work in business and philanthropy has been recognized by the National Association of State Boards of Education, the Horace Mann League and the National Association of Secondary School Principals.

References[link]

External links[link]

• TapSystem.org

Eike Batista
Eike Batista in 2011
Born	(1956-11-03) November 3, 1956 (age 55) Governador Valadares, Minas Gerais, Brazil
Ethnicity	German Brazilian[1][2]
Alma mater	RWTH Aachen University (College dropout)
Occupation	CEO of EBX Group
Net worth	US$ 30 billion (2012)[3]
Children	Thor Batista (b. 1992) Olin Batista (b. 1996)

Eike Fuhrken Batista (Portuguese pronunciation: [ˈajki ˈfuʁkẽj bɐˈtʃistɐ]) (born November 3, 1956) is a Brazilian business magnate who made a fortune in mining and oil and gas exploration.^[4][5] Presently, he is the chairman of Brazilian conglomerate EBX Group. The group includes five companies that trade on the BOVESPA´s Novo Mercado, a special segment of the São Paulo stock market where enterprises with the highest standards of corporate governance are listed. The EBX companies listed on the BOVESPA are: OGX^[6] (oil and gas), MPX^[7] (energy), LLX^[8] (logistics), MMX^[9] (mining) and OSX^[10] (offshore services and equipment).

Early life and career[link]

Eike Batista^[11] is one of seven children of businessman Eliezer Batista da Silva,^[12] who was Minister of Mines and Energy in the João Goulart and Fernando Collor administrations and a former president of Companhia Vale do Rio Doce,^[13] then wholly a state enterprise, between 1961–1964 and 1979-1986. His mother, Jutta Fuhrken, was born in Germany and, from her, Batista says he learned self-esteem and discipline, attributes he considers crucial to his formation as an entrepreneur.^[14] After spending his childhood in Brazil, Batista and his family moved to Europe when he was a teenager, due to his father’s occupation. They lived in Geneva, Düsseldorf, and Brussels. In 1974, he began to study metallurgical engineering at the University of Aachen in Germany. When he was 18 years old, his parents returned to Brazil, yet Batista remained abroad and began selling insurance policies door-to-door to make his living. In interviews, he often mentions that the "stress" and the lessons learned from this experience were essential for his education.

Eike Batista returned to Brazil in the early 1980s and focused his attention on the gold^[15] and diamond trades. He established himself as a salesman, contacting producers in the Amazon area and buyers in large metropolitan centers in Brazil and Europe. When he was 23 years old, he started a gold trading firm, called Autram Aurem, using the Inca Sun as the company trademark and symbol. A year and a half later, the company had earned US$ 6 million.

His entrepreneurial instinct and talent led him to implement the first mechanized alluvial gold mining plant in the Amazon, marking the beginning of the EBX Group. At age 29, he became CEO of TVX Gold, a company listed on the Canadian Stock Exchange, thus initiating his relationship with global capital markets. From 1980 to 2000, he created US$ 20 billion in value with the operation of eight gold mines in Brazil and Canada and a silver mine in Chile.^[16] Between 1991 and 1996, the value of his company more than tripled.

Batista married the model Luma de Oliveira in 1991, and divorced her in 2004. They had two boys, Olin and Thor. Batista enjoys running, swimming and practices marine sports. In the 90s, he was the Brazilian, U.S. and World Champion^[17] in the Super Offshore Powerboat class. In 2006, he covered the 220 nautical miles between Santos and Rio de Janeiro in 3h01m47s and beat the record for the course in his boat, the Spirit of Brazil. Eike Batista^[18] maintains an active digital life, with a personal site with articles, videos and news about his companies. The digital channel that Batista has chosen as his primary means of personal communication is Twitter.^[19] His profile on Twitter, @eikebatista, has over 550,000 followers, who respond to his messages and interact with him. . In 2011, Batista released the book “The Heart of the Matter” (O X da Questão) which recounts his trajectory in the business world and offers tips on entrepreneurialism. Batista is fluent in five languages – Portuguese, German, English, French and Spanish^{[citation needed]}.

On March 17, 2012, the billionaire's older son, Thor Batista, then 20-year old, got involved in a car accident that killed a cyclist and was charged with manslaughter.^[20][21] According to Forbes.com columnist, Clare O'Connor, in the days afterwards, both Mr. Eike Batista and his son Thor have taken to Twitter to procclaim Thor's innocence, claiming that he “was at the speed limit, did a breathalyzer test and signed a statement describing the accident”.^[22]

National and international rankings[link]

In 2011, Batista was listed by Forbes magazine as the 8th richest person in the world^[23] and the richest in South America. His wealth is estimated at US$ 30 billion.^[24] Eike Batista was also featured in Bloomberg Markets magazine as the only Brazilian on the list of the 50 most influential people in global finance, published for the first time in September 2011.^[25] The magazine focused on people “whose comments move markets; whose deals set the value of companies or securities; whose ideas and policies shape corporations, governments and economies”.

At the end of 2010, the magazine ranked Batista as the 58th most powerful person in the world,^[3] placing him as Brazil's most powerful person after the current president of Brazil, Dilma Rousseff.^[26] The newspaper Folha de S. Paulo describes Batista as an example of a "self-made man",^[27] an entrepreneur with a fortune acquired through his own efforts (and not through inheritance).

The top-ranked Brazilian in March 2008, on the Forbes magazine list, was Antonio Ermírio de Moraes, in 77th place with a family estate of US$ 10 billion. Another 17 Brazilians were on the list, including Batista (who in 2008 said his goal was to become the richest man in the world in five years). In 2008 Batista’s fortune was estimated at US$ 6.6 billion and he was ranked at the 142nd place on the list of the richest men in the world. In 2009, he moved up to the 61st position and was considered the richest^[28] man in Brazil.

According to the Brazilian weekly magazine Época, Batista is one of the 100 most influential men in Brazil of 2010. IstoÉ magazine has also listed Batista as one of the 100 most influential people in 2010. In 2011, Batista was included in the 1,000 CEOs ranking by Dinheiro magazine.

Batista has benefited from three decades of experience in international business and has an ability to "generate wealth from scratch".^[29] Since the 1980s, Batista created and put into operation eight gold mines in Brazil and Canada (Amapari, Casa Berardi, Crixás, Musselwhite, New Britania, Novo Astro, Novo Planeta and Paracatu), a silver mine in Chile (La Coipa), and three iron ore mines in Brazil (Mina 63, Tico-Tico and Ipé).

From 2004 to 2010 Eike Batista^[30] created and put into operation five companies: MMX (mining), MPX (energy), OGX (petroleum), LLX (logistics) and OSX (offshore industry).

Project Investments[link]

EBX[link]

The EBX Group produces iron ore in Minas Gerais and Mato Grosso do Sul and has put into operation the first commercial-scale solar power plant^[31] in Brazil. The Group is making investments of an estimated US$ 15.5 billion between 2011 and 2012 in Brazil and is responsible for projects of significant scale in the country, such as the LLX Açu Superport^[32] in São João da Barra (RJ), the MMX Sudeste Superport^[33] in Itaguaí (RJ), and the MPX thermal power plants in Itaqui (MA) and Pecém (CE). These important energy and infrastructure projects are being executed in parallel to OGX´s exploratory campaigns^[34] in Campos (RJ), Santos (SP) and Parnaíba (MA) basins, which have resulted in oil and gas discoveries. There are currently 20,000 people working in the construction and operation of the Group’s projects.^[35]

The EBX Group is headquartered in Rio de Janeiro and also operates in nine Brazilian states. It has offices in New York (USA), Colombia and Chile.

In addition to the infrastructure and natural resources sectors, Eike Batista’s EBX Group also invests other areas, including real estate (REX),^[36] entertainment (IMX)^[37] technology (SIX) and catering (NRX). In Rio, EBX is developing sports, hospitality, gastronomy, health and beauty initiatives.

Since the early 2000s, Batista focused his efforts primarily in the areas of natural resources, energy and infrastructure.

MMX[link]

MMX^[38] is the mining company of the EBX Group, with integrated logistics and low production costs. The company has projects in the Brazilian states of Minas Gerais and Mato Grosso do Sul, as well as in the country of Chile.

MPX[link]

MPX operates in the energy industry in Brazil, Chile and Colombia. The company has complementary businesses in power generation, coal mining^[39] and exploration and production of natural gas. MPX is responsible for the first commercial solar power plant in Brazil in the city of Tauá^[40](CE).

OGX[link]

OGX is the EBX Group company which carries out activities in the exploration and production of oil and natural gas. The company is responsible for the largest private sector exploratory campaign under way in Brazil, with a success rate in exploratory wells of more than 90%.

LLX[link]

LLX is the logistics company of the EBX Group, responsible for building the Açu Superport,^[41] in the state of Rio de Janeiro, projected to be the largest port-industrial complex in Latin America.

OSX[link]

OSX operates in the offshore shipbuilding industry and is constructing the largest shipyard in the Americas, the "Embraer of the Sea," at the Açu Superport^[42](an LLX project) industrial complex. The company also provides services to the offshore oil and natural gas industry in three different segments: shipbuilding, in the charter of Exploration and Production (E&P) equipment and Operation and Maintenance (O&M).

Enterprises[link]

Major companies founded by Eike Batista: EBX, OGX, MPX, MMX, LLX, OSX, REX, AUX, IMX, Gloria Palace, Marina da Glória, MDX, BEAUX, MR.LAM, PINK FLEET, and RJX.

See also[link]

• List of Brazilians by net worth
• German Brazilian

References[link]

External links[link]

Wikimedia Commons has media related to: Eike Batista

• Personal Website
• Personal Twitter
• EBX Group's Website
• EBX Group's Brand Channel on YouTube
• FPSO OSX-1 Hotsite

Persondata
Name	Batista, Eike Fuhrken
Alternative names
Short description	Brazilian businessman
Date of birth	November 3, 1956
Place of birth	Governador Valadares, MG,  Brazil
Date of death
Place of death

T. Boone Pickens
Pickens at the 2011 Time 100 gala
Born	(1928-05-22) May 22, 1928 (age 84) Holdenville, Oklahoma, U.S.
Residence	Dallas, Texas
Alma mater	Oklahoma State University – Stillwater
Occupation	Chairman of BP Capital Management
Net worth	US$1.4 billion(2011)[1]
Spouse	1) Lynne O'Brien 2) Beatrice Carr 3) Nelda Cain 4) Madeleine Paulson
Children	Four children with Lynne O'Brien
Parents	Thomas Boone Pickens & Grace Molonson
Website
www.boonepickens.com www.pickensplan.com

Thomas Boone Pickens, Jr. (born May 22, 1928), known as T. Boone Pickens, is an American business magnate and financier. Pickens chairs the hedge fund BP Capital Management. He was a well-known takeover operator and corporate raider during the 1980s. With an estimated current^[update] net worth of about $1.4 billion, he is ranked by Forbes as the 328th-richest person in America and ranked 879th in the world.^[1]

Early life[link]

Pickens was born in Holdenville, Oklahoma. His father worked as an oil and mineral landman (rights leaser). During World War II, his mother ran the local Office of Price Administration, rationing gasoline and other goods in three counties.^[2] Pickens was the first child born via Caesarean section in the history of Holdenville hospital.^[3]

At age 12, Pickens delivered newspapers. He quickly expanded his paper route from 28 papers to 156.^[4] Pickens later cited his boyhood job as an early introduction to "expanding quickly by acquisition," a business practice he favored later in life.^[4]

When the oil boom in Oklahoma ended in the late 1930s, Pickens' family moved to Amarillo, Texas.^[4] Pickens never served in the military^[4] but instead attended Texas A&M on a basketball scholarship, but he lost the scholarship^[4] and transferred to Oklahoma A&M (now Oklahoma State University), where he majored in Geology. He is a member of the Sigma Alpha Epsilon Fraternity. He graduated from Oklahoma A&M with a degree in geology in 1951. Following his graduation, Pickens was employed by Phillips Petroleum. He worked for Phillips until 1954.^[5] In 1956, following his period as a wildcatter, he founded the company that would later become Mesa Petroleum.^[5]

Career[link]

By 1981, Mesa had grown into one of the largest independent oil companies in the world. Pickens led Mesa's first major acquisition, a takeover of the Hugoton Production Company, which was 30 times the size of Mesa.^[6] He then shifted his focus to acquiring other oil and gas companies by making solicited and unsolicited buyout bids and other merger and acquisition activity.

Pickens corporate acquisitions made him a celebrity during the "deal-making" 1980s. His most publicized deals included attempted buyouts of Cities Service, Gulf Oil, Phillips Petroleum, and Unocal.^[7] It was during this period that Pickens led Mesa's successful acquisitions of Pioneer Petroleum and the mid-continent assets of Tenneco.

These as well as other deals placed Pickens at the center of controversy during the 1980s. His celebrity rose so quickly after the Gulf Oil takeover bid that Time magazine^[8] put Pickens on the cover for the March 1985 issue. He briefly considered running for president in the 1988 elections.^{[citation needed]} During this period, he was often characterized as a corporate raider and greenmailer. This is due to the fact that many of his deals were not completed, although Pickens and the shareholders he represented received substantial profits through the eventual sale of their stock as a result. His later takeover targets included Newmont Mining, a New York-based firm, Diamond Shamrock, and Koito Mfg., Ltd., a Japanese auto-parts manufacturer, making substantial gains in the process.^[9] He was also involved in the creation of the United Shareholders Association (USA), which from 1986–1993 attempted to influence the governance of several large companies. After nearly two years of periodic hearing and debate, in July 1998 the Securities and Exchange Commission voted 4–1 to approve a one-share, one-vote rule, a primary USA objective.

On the local level, Pickens chaired the Board of Regents of West Texas State University in Canyon and in 1987–1988 contributed to the restoration of the administration building known as "Old Main". He was also active in the Republican Party in Potter County. Pickens organized a campaign in the mid-1980s against the Amarillo Globe-News newspaper, for what he claimed was inaccurate reporting about his deals and Mesa. Although the newspaper owner, Morris Communications, replaced its publisher twice during the conflict, Pickens' attempts to have the paper change its editorial policy failed. Shortly thereafter, in 1989, Pickens and Mesa moved to a suburb of Dallas.^[9]

In 1997 Pickens founded BP Capital Management (then called BP Energy Fund) — the initials standing for "Boone Pickens" and not related to British Petroleum. He holds a 46% interest in the company which runs two hedge funds, Capital Commodity and Capital Equity, both of which invest primarily in traditional energy companies such as oil, natural gas, and nuclear power corporations like Halliburton, Schlumberger, and Shaw Group.

In 2006, Pickens earned $990 million from his equity in the two funds and $120 million from his share of the 20% fees applied to fund profits.^[10] In 2007, Pickens earned $2.7 billion, as BP Capital Equity Fund grew by 24% after fees, and the then $590 million Capital Commodity fund grew 40%, thanks to, among others, large positions in the stocks of Suncor Energy, ExxonMobil and Occidental Petroleum.^[11]

Pickens' most recent recognition comes from The Franklin Institute in Philadelphia. T. Boone Pickens received the 2009 Bower Award for Business Leadership for 50 years of visionary leadership in oil and other types of energy production, including domestic renewable energy, and for his philanthropic leadership contributing to education, medical research, and wildlife conservation. ^[12]

Natural gas[link]

Pickens has been speaking out on the issue of peak oil, claiming that world oil production is about to enter a period of irrevocable decline. He has called for the construction of more nuclear power plants, the use of natural gas to power the country's transportation systems, and the promotion of alternative energy. Pickens's involvement with the natural gas fueling campaign is long-running. He formed Pickens Fuel Corp. in 1997 and began touting natural gas as the best vehicular fuel alternative because it is a domestic resource that, among many advantages, is cleaner-burning (Natural Gas Vehicles or NGVs emit up to 30% less pollution than gasoline or diesel vehicles) and reduces foreign oil consumption. Reincorporated as Clean Energy Fuels Corp. in 2001, the company now owns and operates natural gas fueling stations from British Columbia to the Mexican border.

Activism[link]

Political interests and contributions[link]

Since 1980, Pickens has made over $5 million in political donations.^[13] He was a financial supporter of President George W. Bush and contributed heavily to both his Texas and national political campaigns. In 2004, Pickens contributed to Republican 527 groups, including a $2 million^[14] contribution to the Swift Vets and POWs for Truth which ran an advertising campaign asserting that Bush's rival, John Kerry, exaggerated claims about his service in Vietnam, and $2.5 million to the Progress for America advocacy group. In 2005, Pickens was among 53 entities that contributed the maximum of $250,000 to Bush's second inauguration.^[15][16][17]

On July 16, 2007, Pickens wrote an article for the National Review supporting Rudy Giuliani for President. "In Rudy Giuliani, a gracious and committed public servant I’ve known for many years, we see that rare blend of big-picture vision and proven track record of achieving the 'impossible.' We see a forward-looking, accomplished executive eager to tackle the challenges of today’s America and ensure that tomorrow we wake up stronger, freer, and more united than ever before."^[18] Pickens was an executive-committee member of the Rudy Giuliani presidential committee.

Pickens chaired the celebration of the 40th anniversary of the American Spectator, a conservative U.S. monthly magazine covering news and politics.^[19]

Pickens has focused his advocacy on alternative energy such as solar and wind. The Washington Post says that "perhaps the strangest role" Pickens "has fashioned for himself is his current one: the billionaire speculator as energy wise man, an oil-and-gas magnate as champion of wind power, and a lifetime Republican who has become a fellow traveler among environmentally minded Democrats – even though he helped finance the 'Swift boat' ads that savaged" Sen. John F. Kerry's presidential campaign. In an editorial, the New York Times reports Pickens "has decided that drilling for more oil is not the whole answer to the nation's energy problems.^[20]

In the spring of 2010, Senator Kerry reached out to Mr. Pickens and encouraged his support of energy/climate change legislation he was drafting with Senators Lieberman and Graham. During a May 2010 meeting with reporters, Senator Kerry endorsed key provisions of “the Pickens Plan,” incorporating aspects of that in the Kerry-backed legislation calling for the greater use of domestic natural gas to replace foreign oil/diesel/gasoline in America’s heavy duty vehicle fleets.^[21]

Swift Boat challenge[link]

On November 6, 2007, Pickens offered a million dollars to anyone able to dispute any claims made in political ads by the Swift Vets and POWs for Truth (SVPT), a group he had supported during the 2004 presidential election.^[22] John Kerry, whose military record and anti-war activism during Vietnam was the target of the group's book and media campaign, sent Pickens a letter on November 16, 2007, accepting the challenge, requesting that Pickens donate the money to the Paralyzed Veterans of America should he succeed in disproving any of the SVPT claims.^[22] In response to Kerry's acceptance of the challenge, Pickens issued a letter the same day, narrowing the original challenge to the SVPT ads, and requiring Kerry to provide his Vietnam journal, all of his military records, specifically those covering the years after his active duty service, and copies of all movies and tapes made during his service. Pickens' letter also challenged Kerry to agree to donate $1 million to the Congressional Medal of Honor Foundation, if Kerry "cannot prove anything in the Swift Boat ads to be untrue."^[23] Kerry later accused Pickens of "parsing and backtracking" on his initial offer and wrote that "I am prepared to prove the lie and marshal all the evidence, the question is whether you are prepared to fulfill your obligation."^[24]

On June 22, 2008, a group of Vietnam veterans who previously served with and now work with Kerry accepted the challenge and sent a 12-page letter — with a 42-page attachment of military records to support their case — to rebut several of the accusations of the Swift boat group.^[25] Pickens has responded with a message stating "In reviewing your material, none of the information you provide speaks specifically to the issues contained in the ads,” he wrote, “and, as a result, does not qualify for the $1 million."^[26]

Lobbying efforts to stop horse slaughter[link]

Pickens lobbied for the American Horse Slaughter Prevention Act (HR 503) which would prohibit the slaughter for human consumption and the trade and transport of horse flesh and live horses intended for human consumption.^[27][28]

Attempt to sell natural gas with a California Ballot Initiative[link]

In November 2008, California voters rejected a referendum by a 60% to 40% margin regarding natural gas. Pickens owns Clean Energy Fuels Corporation, a natural gas fueling station company^[29] that was the primary backer of the November 2008 Proposition 10 on California's ballot. Much of the measure's sale of $5 billion in general fund bonds to provide alternative energy rebates and incentives ($9.8 billion after interest) would have benefitted Pickens' company to the exclusion of almost all other clean-vehicle fuels and technology.^[30]

Philanthropy[link]

Pickens has given more than $700 million away to charity,^[31] of which nearly $500 million has been donated to Oklahoma State University.^[32] Pickens is among the billionaires who have made The Giving Pledge, a commitment to give away half of his wealth for charitable purposes.^{[32][33][34][unreliable source?]}

Donations to Oklahoma State University[link]

Boone Pickens Stadium at Oklahoma State University in Stillwater, Oklahoma.

Pickens has been a major financial contributor to his alma mater, the Stillwater campus of Oklahoma State University (OSU). Through his contributions, Pickens spearheaded an initiative to create an athletic village just north of the existing campus. In order to do so, hundreds of homes were acquired by the OSU administration, one via eminent domain, and demolished using Pickens' contributions.

Pickens' gift remains the largest donation to a university's athletic program in collegiate history. His total contributions to OSU come to over $400 million. Over $265 million, or 66%, of his donations have been towards athletics. Pickens also has made substantial academic gifts to Oklahoma State University, particularly to the School of Geology, which is named for him.

On December 30, 2005, Pickens made a $165 million gift to Oklahoma State University. The New York Times reported that "the money spent less than an hour on December 30 in the account of the university's charity, O.S.U. Cowboy Golf Inc., before it was invested in a hedge fund controlled by Mr. Pickens, BP Capital Management."^[35] Pickens, who is on the board of the O.S.U. Cowboy Golf, waived any management fees for the OSU monies.^[36] All profits of the fund go to growing the OSU gift. The gift is intended to help fund an upgrade of the football stadium and construction of an athletic village, but sparked controversy because OSU planned to use eminent domain to acquire residential property for the projects.^[37] The donation comes after a $70 million gift from Pickens to OSU in 2003, which was similarly structured using O.S.U. Cowboy Golf, Inc.

On July 28, 2007 the Board of Regents of Oklahoma State University approved a resolution to move $28 million from the OSU Foundation into Pickens' BP Capital Management company in Dallas. Oklahoma State has previously invested $277 million in the fund. Pickens has been waiving fees for the university's investments with his fund.^[35][38]

On May 21, 2008 Pickens donated $100 million dollars to academics at Oklahoma State University. The gift will be matched by the state of Oklahoma.^[39][40]

In October, 2008 it was reported in the NY Times that due to the recent financial recession, some of Pickens's gifts to the athletic department had seen a large decline in their market value while being managed in his hedge funds. The same NY Times article noted that due to the worldwide recession, most other schools and charitable organizations were also experiencing problems with investments. The article also mentions that Pickens' management of donated funds had previously "turned $6 million into $31 million" for the school's athletic fund.^[35][41]