Levine & Co.

On February 20, 1987, Dennis Levine, a managing director of Drexel Burnham Lambert at only age thirty-two, was sentenced to two years in federal prison for securities fraud, income tax evasion, and perjury. His lenient sentence was a reward for betraying his entire network of co-conspirators, including the flamboyant arbitrager Ivan Boesky, who has been a key figure in most of the major hostile takeovers of recent years.

Levine had thought he was doubly protected from exposure. He was making his stock transactions through a coded account with a branch of a Swiss bank located in Nassau. Although Switzerland and the Bahamas have strict banking-secrecy laws, both countries finally yielded to American pressure and revealed the identity of the mysterious “Mr. Diamond.” Evidently, they were afraid that a refusal to cooperate with the Securities Exchange Commission (SEC) and the Justice Department would smack of collusion and could lead to hostile measures to cripple or destroy the bonanza of offshore banking which has had such a strong appeal to many shy and self-effacing American entrepreneurs.

Dramatized accounts of true crimes have become standard fare since the publication of Truman Capote’s IN COLD BLOOD in 1966, but LEVINE AND CO. is unique in being a dramatized account of a true white-collar crime. Douglas Frantz is an excellent writer who was an investigative reporter for many years in Chicago and Washington, D.C.; he is now a financial reporter for the LOS ANGELES TIMES. He limits his creative contribution to inventing a bit of dialogue and interpreting some of the principal actors’ thoughts and feelings; but this is enough to make the book dramatic as well as highly informative. Dennis Levine is portrayed as a dynamic and charismatic young man who preyed on weaker people and seduced them into joining his network of insider informants.

Frantz’s book makes it clear that insider trading is impossible to eliminate. Human nature is weak, the temptations are enormous, and there are too many insiders involved in big corporate deals, all the way down the hierarchy from the corner executive suites to the paralegals, secretaries, typists, printers, proofreaders, and messengers. The SEC can only hope to frighten the majority into staying straight by making examples of the few they catch red-handed. Perhaps the moral of LEVINE AND CO. is not “Do not do it!” but “Do not get too greedy!”