‘Insider’ Levine Given Two-Year Prison Term

Investment banker Dennis Levine, a key figure in the Wall Street insider trading scandal, was sentenced today to two years in prison and fined $362,000 for securities fraud, perjury and tax evasion.

“I swear I will never violate the law again,” Levine told U.S. District Judge Gerard Goettel before his sentencing.

His voice cracking, Levine added, “I beg you, let me put the pieces of my life together again.’

Levine had faced as much as 20 years in prison and fines of $610,000, but Goettel noted that the wealthy banker has been cooperating with investigators.

Levine, 34, of Manhattan, a former managing director at Drexel Burnham Lambert Inc., led the Securities and Exchange Commission to Wall Street speculator Ivan Boesky, who was accused of making $50 million in illegal profits from trading on inside information supplied by Levine.

Boesky agreed in November to pay a $100-million penalty and pleaded guilty to an unspecified criminal charge.

Levine pleaded guilty in June to four counts of securities fraud, perjury and tax evasion and Goettel had delayed sentencing until today while Levine aided investigators.

At the time of his plea, Levine signed a consent order settling a civil suit brought by the SEC and agreed to pay $11.6 million, much of it stashed in Bahamian bank accounts.

Levine publicly admitted only one specific illegal transaction: a 1984 purchase of Jewel Companies stock which he knew would soon be the subject of a takeover bid. When the bid from American Stores Inc. was made public, the value of Jewel stock soared and Levine sold the stock at a $1.2-million profit.

The SEC had charged that Levine actually netted $12.6 million in similar investments over a five-year period when he worked at the investment houses of Smith Barney, Harris Upham & Co., Lehman Brothers Kuhn Loeb, later Shearson Lehman Brothers, and Drexel.

Levine also admitted underpaying his federal income taxes by about $1 million a year in 1983 and 1984.