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Dennis Levine
Convicted Insider Trader; Investment Banker Whose Arrest Unraveled the 1980s Wall Street Scandals
Managing Director, Drexel Burnham Lambert (previously Merrill Lynch, Smith Barney, Lehman Brothers)
Overview
Dennis Levine was a managing director at Drexel Burnham Lambert whose arrest in May 1986 triggered the chain of events that brought down the largest insider trading conspiracy in Wall Street history. Starting in 1978 while at Smith Barney, Levine used secret accounts at Bank Leu in the Bahamas to trade on inside information about pending mergers and acquisitions, amassing $12.6 million in illegal profits from 54 stocks over eight years. An anonymous letter from a Merrill Lynch compliance officer in Caracas tipped off authorities. Levine immediately cooperated with the SEC and U.S. Attorney, implicating Ivan Boesky, who in turn brought down Michael Milken and Drexel Burnham Lambert. Levine pled guilty to four felonies and was sentenced to two years in prison.
Key Affiliations
Controversies & Concerns
Operated secret trading accounts at Bank Leu in Nassau, Bahamas from 1978 to 1986
Earned $12.6 million in illegal profits from insider trading on 54 stocks over 8 years
Tipped off Ivan Boesky with inside information about pending M&A deals
His cooperation with authorities triggered the unraveling of the entire 1980s insider trading conspiracy
His arrest was the first domino: Levine gave up Boesky, Boesky gave up Milken, Milken brought down Drexel
Related Investigations (1)
Criminal Charges & Violations
3 documented violations
15 U.S.C. 78j(b), SEC Rule 10b-5Securities Fraud: Insider trading on material nonpublic information from 54 stocks(Federal)
26 U.S.C. 7201Tax Evasion: Failure to report illegal trading profits(Federal)
18 U.S.C. 1621Perjury: False statements to SEC(Federal)
Known Associates & Connections
Ivan Boesky
Received insider tips from Levine; subsequently exposed by Levine cooperation
Michael Milken
Ultimately brought down through chain of cooperation starting with Levine
Sources & Documentation
2 documented sources from official records, investigations, and reports
Personal Information
- Born
- 1952
- Birthplace
- Queens, New York City, USA
Education
- •Baruch College, City University of New York (BBA)
- •Baruch College (MBA)
Key Timeline
1978
Opens secret trading account at Bank Leu in the Bahamas; begins insider trading
1985
Joins Drexel Burnham Lambert as Managing Director of M&A
May 1985
Anonymous letter from Caracas tips off Merrill Lynch compliance about suspicious trades linked to his ring
May 12, 1986
Arrested by SEC; charged with insider trading on 54 stocks totaling $12.6M in illegal profits
June 5, 1986
Pleads guilty to four felonies; begins cooperating with government, implicating Ivan Boesky
1991
Sentenced to 2 years in federal prison; fined $362,000