Lawyer Gets Year and Day for Insider Trading

A former partner in a top Wall Street law firm was sentenced today to a year and a day in prison for his part in the Dennis Levine insider trading scandal.

Despite pleas for leniency by Ilan K. Reich and his lawyer, U.S. District Judge Robert W. Sweet said he had to sentence Reich to prison because he was “a symbol of the sickness of our society.”

Reich, 32, of Manhattan, pleaded guilty last October to one count each of securities fraud and mail fraud. He could have been sentenced to a prison maximum term of 10 years and fined up to $101,000.

Sweet did not fine Reich but placed him on five years’ probation.

Gave Levine Information

Reich, formerly a partner at the prominent New York firm of Wachtell, Lipton, Rosen & Katz, was indicted last fall and charged with passing insider information to Levine, the central figure in a ring of Wall Street professionals who swapped confidential corporate information for personal gain.

Levine, who federal prosecutors say made more than $12 million in illegal profits by trading on insider information, has pleaded guilty to four criminal counts and is awaiting sentencing.

Reich’s lawyer, Robert Morvillo, told Sweet before sentencing that his client “did not make a single penny of profit” from the information that he passed to Levine.

Morvillo also noted that Reich had been disbarred and “has lost his status as a superstar lawyer . . . forever.”

Morvillo also said Reich had lost all his assets in a $435,000 settlement of a Securities and Exchange Commission civil action against him.

In asking Sweet to be “as merciful as possible and not add to this tragedy,” Morvillo claimed insider trading was “largely a victimless crime.”

But in unusually long sentencing remarks, Sweet noted “by your giving insider information to Dennis Levine, you betrayed your trust, your family, your firm and all of us.”