INVESTMENT BANKING: Mikhail, Meet Comrade Mike

Michael Milken of Los Angeles, the controversial czar of junk bonds, seems just the kind of free-enterpriser the Soviet Union might single out in a blast against capitalism's excesses. Yet Milken now fancies the Soviet Union as a potential client for his fast-lane financial advice. So far, Milken, 41, a centimillionaire and resident wunderkind at the investment firm Drexel Burnham Lambert, has got little further than meeting Mikhail Gorbachev in a crowded room, when the Soviet leader visited Washington and talked with a group of U.S. business executives. But Milken, still pursuing a deal, disclosed two of his proposals last week. In one scheme, Drexel Burnham would help finance U.S.-Soviet medical ventures that could reap profits from Soviet advances in eye surgery and cancer treatment. Pitching another idea, Milken proposes that the Soviets take advantage of their plentiful commodities by issuing bonds backed by stockpiles of gold or crude oil.

At home, it is Milken who is being pursued. The U.S. Attorney's office in Manhattan reportedly issued a new round of subpoenas in the long-running insider-trading probe of Milken and Drexel Burnham, allegedly implicated by Ivan Boesky in 1986. Milken and his firm have denied any wrongdoing.