Investment Banker Pleads Guilty to Insider Trading : Wall St. Banker Admits Guilt as ‘Inside Trader’
Dennis B. Levine, the investment banker accused of what federal officials called the largest insider trading scheme ever discovered, pleaded guilty today to four counts of securities fraud, tax evasion and perjury.
Levine, 33, also settled a civil suit filed against him by the Securities and Exchange Commission, which accused him of making $12.6 million in illicit profits by misusing confidential information during the last five years. Details of the settlement were not immediately released.
Flanked by his lawyers, Levine admitted that he used inside information about a 1984 tender offer for Jewel Companies Inc. to make a quick $1.2-million profit in Jewel stock.
At the time, Levine worked at Shearson Lehman Bros. He moved in 1985 to Drexel Burnham Lambert, where he became a managing director and a top member of the firm’s mergers department.
Levine lost his job when the SEC charged that he made a total of $12.6 million in illegal profits through insider trading at Drexel, Shearson and a previous employer, Smith Barney, Harris Upham.
Admits Lying to SEC
Levine also admitted that he understated his income by about $2 million a year on his federal tax returns for 1983 and 1984, and that he lied under oath to the SEC when the commission began investigating his trades.
U.S. District Judge Gerard L. Goettel set sentencing for July 9. Each count carries a possible five-year prison sentence, and the four counts together mean a possible $610,000 in fines.