Figure in Levine Insider Case Gets Jail Term, Fine
A former vice president at the prestigious investment firm of Goldman, Sachs & Co. on Monday became the second person to be sentenced in the Dennis B. Levine insider trading case, drawing a 30-day jail term and a $10,000 fine.
David S. Brown, 32, pleaded guilty Sept. 4 to having tipped Levine--through another member of the ring, former Shearson Lehman Bros. executive Ira D. Sokolow--to the terms of at least two impending takeover deals in which his firm was involved. Levine paid Sokolow $125,000 for the tips, prosecutors said, and Sokolow has told authorities that he passed $27,500 of that to Brown. Brown recalls receiving $30,000, according to his lawyer, David Frankel.
Brown also made at least $15,700 in illicit profits on his own trading, the Securities and Exchange Commission has charged.
Boesky Involved
Some of Brown’s tips were passed by Levine to stock speculator Ivan F. Boesky, who in November agreed to pay $100 million to federal authorities in settling their insider trading charges against him.
Sokolow pleaded guilty earlier in connection with the case and is serving a prison term of one year and one day. Levine and two other members of the ring have also pleaded guilty but have not been sentenced.
Brown, who is now employed by a film production company in a clerical job, will serve his jail sentence on weekends. He was also sentenced to 300 hours of community service and three years’ probation by U.S. District Judge John F. Keenan. He has also been permanently barred from the securities industry and will lose his license to practice law.
“He’s now got to begin the difficult process of putting his life back together,” Frankel said.
Faced Longer Sentence
Brown faced a maximum sentence of 10 years in jail and a $500,000 fine after pleading guilty to one count each of securities fraud and mail fraud.
His sentencing came after Assistant U.S. Atty. Charles F. Carberry told the judge that Brown provided prosecutors with “information that was of limited assistance but was helpful in clearing up some details concerning the Levine ring.” Brown had also told prosecutors that he had tipped an unidentified stock speculator to his own cooperation with the government, a step that interfered with the government’s investigation.
In October, Brown settled SEC civil charges in the case by paying $145,000 in penalties, without admitting or denying the charges.
Meanwhile, in Washington, SEC Chairman John S. R. Shad said the commission is still involved in insider trading investigations of “major proportions” but added that he thinks all major current cases will be resolved by late spring. He spoke at a meeting of the Garn Institute of Finance.
