Dennis Levine

Source: Wikipedia, the free encyclopedia.
Dennis Levine
Born (1952-08-05) August 5, 1952 (age 71)
Bayside, Queens, New York
Alma materBaruch College
OccupationInvestment banker

Dennis B. Levine (born August 5, 1952)[1] is a corporate consultant and former investment banker. He was a managing director at the investment banking firm Drexel Burnham Lambert in the 1980s. Levine was one of the first of several high-profile insider trading defendants in the Wall Street insider trading investigations of the mid-1980s.[2] As a result of the investigation by and subsequent proceedings, Levine pleaded guilty.[3]

Early life

Levine grew up in a middle-class

MBA
from the same college in 1976.

Career

After being hired away from his career at

Smith Barney's corporate finance department and worked in its Paris office specializing in mergers and acquisitions.[5] He moved to Lehman Brothers in 1981. Shortly after Lehman was bought by American Express in 1985, Levine moved to Drexel as a managing director.[6]

Levine spent most of his career as a specialist in

Ron Perelman's takeover of Revlon
.

After his return to the business world, Levine re-entered to the finance world as president of ADASAR Group, a financial consulting firm. Over the last 30+ years, Levine has worked as a global strategist for innovative technology trends, focusing on controlled environment agriculture and sustainability, including food, water and energy systems.[9] He also lectures at universities and organizations on a host of contemporary issues from business ethics to emerging technology developments.[8]

Insider trading

Over the years, Levine built a network of professionals at various Wall Street firms. Participants exchanged and traded on information that they obtained through their work. Levine placed his trades through an account maintained under an assumed name at

Pictet & Cie, he moved his business to Bank Leu in May 1980, eventually earning $10.6 million in profits.[7] Like most Swiss banks, Bank Leu had a long tradition of secrecy
. Additionally, the Bahamas had some of the strictest bank secrecy laws in the world; with few exceptions, Bahamian banks were barred from disclosing any information about a customer's banking relationship to a third party.

Some Bank Leu officials soon began to copy, or "piggyback", Levine's trades for their own accounts. In the process, they too profited from Levine's trades. To cover the trail, they broke up Levine's trades among several brokers. Unfortunately for Levine, they steered a large number of his trades through a broker at

Merrill Lynch
, who also began piggybacking the trades for himself.

In May 1985, Merrill Lynch detected suspicious activity in that and two other brokers' personal trading accounts. An internal investigation led to Bank Leu. Unable to pierce the veil of secrecy, Merrill Lynch forwarded the affair to the

obstruction of justice. Their story fell apart when the noted attorney Harvey Pitt, whom the bank had retained, noticed a huge gap between the actual statements of the bank's managed accounts and the omnibus records. At that point, the bank decided to co-operate with the SEC.[7]

The Bahamian Attorney General, Paul Adderly, issued an opinion that stock trading was separate from banking. Therefore, since Bank Leu did not have a "banking relationship" with Levine, any disclosure about him would not violate Bahamian banking law. The bank was thus free to reveal Levine's name and he was arrested soon afterward. At the same time, he was sued by the SEC.[7]

On June 5, 1986, Levine was forced to plead guilty to

disgorge $11.5 million—at the time, the largest such penalty in SEC history. He also agreed to a lifetime ban from the securities industry. Levine also agreed to pay $2 million in back taxes out of the amount he disgorged to the SEC.[7][10]

Subsequently, Levine directly implicated powerful

IRS, Goettel did not "commit" the fines, meaning that he would not be held in contempt of court if he left prison without paying them. At sentencing, Goettel said that Levine had helped expose "a nest of vipers on Wall Street", of which Levine himself had been a part of.[12]

Levine said that after his arrest, he seriously considered fighting the charges. He claimed that the government circumvented Bahamian law in order to obtain most of the evidence against him (even though he was guilty), including records of his phone calls. However, he said, the possibility of additional charges in a superseding indictment—possibly including the powerful

Arthur Liman, told him that if he went to trial, he faced up to 20 years in prison if found guilty and the loss of everything he owned.[8]

The SEC and the US Attorney's office conducted investigations that soon extended well beyond Levine's trading group. There seemed to be an entire web of relationships among Wall Street professionals exchanging information and other favors, including the parking of stock, the accumulation of stock to pressure a firm's management and stock price, all unrelated to Levine. Well known market participants were soon caught up in the investigations, including Siegel, Boesky and the Goldman Sachs senior partner and arbitrageur Robert Freeman. The investigations also indirectly led to

junk bond market at the time. In 1991, Levine wrote the book Inside Out—an Insiders Account of Wall Street.[citation needed
]

References

  1. ^ Stone, Michael (July 28, 1986). "Insiders: The Story of Dennis Levine and the Scandal That's Rocking Wall Street". New York: 26–34.
  2. ^ "Greed on Wall Street". Newsweek. 1986-05-26. Archived from the original on June 30, 2007. Retrieved 2007-08-22.
  3. ^ "THE INSIDE STORY OF AN INSIDE TRADER The author's arrest set off a series that toppled Wall Streeters like dominoes, from Boesky to Milken". Fortune. May 21, 1990. Retrieved 2020-03-26.
  4. ^ Fechter, Melvin Through the Eye of a Jew, Volume II, September 20, 2013
  5. ^ "INSIDE DENNIS LEVINE He was a formidable operator who had his insider-trading ring planned when he was all of 27". CNN Money. September 28, 1987. Retrieved 2020-03-25.
  6. ^ Coll, Steve (May 22, 1986). "The Puzzling Wall Street Saga of Dennis Levine". The Washington Post. Archived from the original on 2020-03-26. Retrieved 2020-03-25.
  7. ^
    ISBN 0-671-63802-5
    .
  8. ^
    ISBN 0-399-13655-X
    .
  9. ^ "Navajo Truth - STOP SB 2109". Facebook. Archived from the original on 2022-02-26. Retrieved 2020-03-26.
  10. ^ Hiltzik, Michael A. "Levine Guilty of fraud, perjury and tax evasion", Los Angeles Times, 1986-06-06.
  11. ^ "THE INSIDE STORY OF AN INSIDE TRADER the author's arrest set off a series that toppled Wall Streeters like dominoes, from Boesky to Milken. Here's how he slipped into crime -- and what it did to his life. - May 21, 1990".
  12. ^ Widder, Pat. "Inside trader gets 2 years, $360,000 fine", Chicago Tribune, 1987-02-21.

External links

Retrieved from "https://en.wikipedia.org/w/index.php?title=Dennis_Levine&oldid=1227264664"