Dennis Levine left prison to testify on Capitol Hill.

The first executive to topple in Wall Street’s unfolding insider-trading scandal told a congressional subcommittee that his superiors were poor managers who subtly encouraged the use of illegal insider tips, lawmakers attending the closed session said. Levine, 34, a merger specialist at Drexel Burnham Lambert when he was arrested on May 12, 1986, testified under subpoena before the House Energy and Commerce investigations subcommittee. Rep. John Dingell (D-Mich.), the subcommittee’s chairman, said afterward the testimony was “lengthy, helpful and gave the committee a better appreciation of some of the problems associated with insider trading, specifically as it relates to mergers and acquisitions.” But Rep. Gerry Sikorski (D-Minn.) said “it was not a story that engendered compassion. It was more akin to the curiosity one feels when one turns over a rock in a brook and looks to see what’s underneath.”