(FORTUNE Magazine) – NO MATTER HOW the Boesky scandal affects Michael Milken, he has already nailed down his place as the premier financier of his generation. As of mid-December, Drexel Burnham Lambert's secretive junk bond wizard had not been formally accused of any wrongdoing; so far, the Securities and Exchange Commission has only issued a subpoena requiring him to provide information. But as the man who arranged financing for some of the deals the SEC is reportedly investigating, Milken, 40, faces the greatest challenge of his career: restoring his and his firm's credibility. T. Boone Pickens, C.E.O. of Mesa Petroleum and a Drexel client, thinks Milken will make it. ''I would be shocked,'' he says, ''if Michael Milken is involved in illegal insider trading.'' A list of Milken's deals in 1986 reads almost like a summary of the year's business news. He stood ready to finance Ronald Perelman and Revlon in their run at Gillette (see page 54). With others he financed Safeway's $4.2-billion leveraged buyout. He helped Wickes acquire Collins & Aikman through a friendly tender offer (see page 105). For Frank Lorenzo's Texas Air he raised hundreds of millions, which helped the company swallow Eastern (see page 72). His operations will account for around 25% of Drexel's expected $4 billion in revenues in 1986 and perhaps a quarter of its $500 million in profits. Milken, who by choice is not pictured in the company's annual report, by some accounts brings home between $25 million and $55 million from Drexel. Income from other sources, such as investments in stocks and real estate, is said to equal that. His net worth, reportedly around $500 million, makes him one of America's richest men. Milken majored in economics at Berkeley (where he was elected to Phi Beta Kappa), then received an M.B.A. degree at the University of Pennsylvania's Wharton School in Philadelphia. While there he took a job with Drexel. Trading junk bonds -- which carry high risk and offer high returns -- attracted him because he believed they were less risky than most investors thought. In 1978 Drexel let him move his operation to his native California. Milken had already begun to underwrite junk issues and to line up institutional clients, including insurance companies and savings & loans, to buy the bonds. Through Milken's network, a raider organizing a high-risk takeover could raise hundreds of millions or even billions of dollars in days. ''He's brilliant,'' says Frederick Joseph, C.E.O. of Drexel and Milken's boss, ''simply the smartest man I've ever met.'' Far from ostentatious, Milken avoids the glittery Southern California scene. He lives in a comfortable house in Encino, near where he grew up. He spends nearly all his little spare time with his wife and children. Though obviously driven, he doesn't seem motivated by money. His appetite for doing deals is insatiable, and it fits with an almost religious zeal to assist in the restructuring of U.S. business. Tired, weak companies need a good shaking up, he believes. When accused of being merely a plunderer, he is sincerely offended. Milken thinks poor managers, not takeovers, endanger American companies. Security and privacy, always prized by Milken, have become more precious since the Boesky affair. He will not speak to reporters and is said to employ several bodyguards. Though already extraordinary, curiosity about this mysterious young man and his role in creating wealth on Wall Street can only grow.