Dennis Levine
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Dennis Levine (born 1953) was a prominent player in the Wall Street insider trading scandals of the mid-1980s. As a managing director at Drexel Burnham Lambert, he was charged with insider trading by then U.S Attorney Rudy Giuliani, eventually leading investigators to the arrest of Ivan Boesky.
Levine grew up in a middle-class family in Bayside, Queens and graduated from New York City's Baruch College. He became an expert at gathering and trading on insider information. Levine spent much of his working life on the phone developing an insider trading ring of professionals working at a number of Wall Street firms. Participants exchanged and traded on inside information they obtained through their work. Levine placed his trades through an account maintained under an assumed name at offshore accounts in the Bahamas, especially Bank Leu. These offshore banks executed those transactions through several brokers, including Merrill Lynch. One of their brokers suspected that trades from their offshore accounts were based on inside information and started piggy backing personal trades. In May 1985, Merrill Lynch detected suspicious activity in that and two other brokers' personal trading accounts. Following an internal investigation, they passed the information on to the U.S. Securities and Exchange Commission (SEC). The ensuing investigation lead to the offshore banks and eventually to Dennis Levine, and he began to cooperate with authorities.
The SEC and the US Attorney's office conducted investigations that soon extended well beyond Levine's insider trading ring. 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 firms' management, and stock price manipulation. Well known market participants were soon caught up in the investigations, including investment banker Martin Siegel of Kidder Peabody, arbitrager Robert Freeman of Goldman Sachs and arbitrageur Ivan Boesky. Eventually the investigations led to Michael Milken who was at the center of the junk bond universe.
Due to his cooperation with federal prosecutors, Levine was sentenced for perjury, securities fraud, and tax evasion to two years in prison and a $362,000 fine. After being released from prison, he returned to the finance world as president of ADASAR Group, a financial consulting firm.
