By Isla Binnie
Feb 27 (Reuters) - The U.S. government's top securities
regulator is investigating the relationship between
philanthropist and one-time securities magnate Michael Milken
and financial services firm Guggenheim Partners, Fortune
magazine reported on Wednesday.
The Securities and Exchange Commission (SEC) is examining
whether Milken, who is barred from the securities industry after
serving time in prison for fraud, is violating terms of that ban
by effectively acting as a manager of Guggenheim investments
beyond his own, according to sources cited by Fortune in a
report posted on its website.
Milken, whose high-yield debt business earned him the title
of the "junk bond king", is allowed to manage his own money but
cannot act as an investment adviser or broker.
The regulator is investigating a number of transactions,
Fortune said, 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
Reuters contacted a spokesman for the SEC, who declined to
Guggenheim's media team was not immediately available for
comment. Fortune quoted chief executive Mark Walter as saying
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.
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