Inside Trader Levine Is Back in Hot Water

From Associated Press

No sooner had Dennis E. Levine begun talking about his repentance from a life of Wall Street crime than he was hit with claims of unethical behavior by disgruntled clients of his new business.

Levine, 39, is the former big-time investment banker who led a double life as an inside trader, racking up $11.6 million in profits by trading on illegal information about corporate takeovers before his arrest in 1986.

Levine served 17 months of a two-year prison term for securities fraud, tax evasion and perjury, and was released in September, 1988. He has since lectured college students, started a consulting firm and collaborated on a book about his experiences.

On Monday--the first day of a book promotion tour--Levine denied accusations in a television report that he acted improperly when he referred clients of his new firm to lenders who turned out to be con men, including someone he had befriended in prison.


Levine was paid tens of thousands of dollars in fees for steering two clients seeking to raise money for projects to possible lenders who were linked to past frauds, the CBS News program “60 Minutes” reported Sunday.

Levine said he did not know about past suspicious or illegal behavior of a Panamanian company investigated by the FBI, a once-convicted Las Vegas businessman linked to the Mafia or a Florida company accused of ripping off customers, as reported on “60 Minutes.”

“People do not hire me as a detective,” Levine said in an interview with the Associated Press. “They hire me to help to structure deals and negotiate on their behalf.”

Levine said he has not been sued over any of the accusations aired in the telecast. A lawyer for Levine, Martin Flumenbaum, said he was not “aware of any repercussions” from the report.


The program also said Levine introduced a client to a man whom Levine had met at prison in Lewisburg, Pa. Levine acknowledged that he did not tell the client about the history of the friend, identified as Jim Massaro.

“60 Minutes” said Massaro was serving time for business fraud. The client told the news program that Levine described Massaro as someone he had met while working at Drexel.

“This gentleman had a right to privacy like anybody else,” Levine said Monday. “The fact that he made a mistake in his past and didn’t have a case with a high degree of publicity and was not acting as a fiduciary . . . put me under no legal or moral obligation to disclose it.”

That explanation jibes with Levine’s personal belief in a second chance.


Levine is 60 pounds lighter than the tubby man who in 1986 moved from the powerful but relatively anonymous job of brokering some of the decade’s biggest hostile takeovers to ignominy as Wall Street fallen titan.

Over eight years, Levine used non-public information acquired from three big Wall Street firms where he worked and a network of cronies to make millions trading through a secret account in a Bahamaian bank. The scandal mushroomed into Wall Street’s most explosive ever.

In his book “Inside Out,” written with William Hoffer, Levine describes the double life: rising Wall Street star who received a $1-million bonus from Drexel Burnham Lambert Inc. and obsessed schemer who traded on inside information from pay phones using code names such as Mr. Diamond and Mr. Wheat.

“Whatever the term is for beyond out of control, I was it,” Levine said. “I craved it. I thought I was smarter than the system, and I’m not. I never thought they’d catch me, and they did.”


Levine blames the genesis of his illegal behavior at age 25 partly on his underdog status as a middle-class kid without a prestigious academic background. He was making $19,000 a year working for a bank when he began cheating.