Inside Out: An Insider's Account of Wall Street. - book reviews

Washington Monthly, Jan-Feb, 1992 by Kurt Eichenwald

Inside Out: An Insider's Account of Wall Street. Dennis B. Levine with William Hoffer, Putnam, $22.95. Reading Dennis Levine's book about his life and crimes on Wall Street, it was hard not to think of that old phrase that accompanied the publication of memoirs by Watergate conspirators: Don't buy books from crooks.

Levine was the first in a line of investment bankers and traders brought down by insider trading charges in what was to become the scandal of all Wail Street scandals. Although he made more that $1 million a year as an investment banker with Drexel Burnham Lambert, Levine stole confidential information entrusted to investment bankers and used it for his own profit by trading through a bank in the Bahamas in a multimillion-dollar swindle. Faced with the prospect of prison, Levine opted for his greatest trade: He would turn in his friends in exchange for a lighter sentence. Along the way, he fingered Ivan Boesky, the stock speculator who in turn offered evidence against Michael R. Milken, the former head Of Drexel's junk bond division and a senior general in the takeover wars.

Now Levine is back, peddling his own story for even more profits. It is a project that had the potential of being worthwhile. None of the other high-profile crooks from the eighties has taken pen to paper to try to describe what made him tick. No matter how many stories were written about these fellows with seemingly limitless greed, nothing could be more fascinating than one of them describing the behind-the-scenes action.

Unfortunately, the promise of such a project is sacrificed for the sake of Levine's own self-aggrandizement. Throughout this tedious work, Levine seems nothing more than a dissembler who, five years after pleading guilty, has learned from his crimes only that it's best not to get caught, He has slapped together a thoroughly unbelievable, self-promoting tome that rounds out his career perfectly: an unremarkable investment banker turned unimaginative crook turned lousy author.

In 431 pages of excuses in apologetic multi, Levine details what he contends is the truth about how he lied to his friends, lied to his wife, lied to his child, lied to his business associates, and, when the government was on his tail, persuaded others to lie for him. He insists he now knows this was wrong. But, with much grand proclamation, he portrays himself as a man whose relatively minor legal violations harmed no one.

Bunk. Dennis Levine is a self-proclaimed reformed crook who, if his book shows anything, still does not comprehend the magnitude of what he did. Levine stole more than $10 million from other investors widows, mutual fund managers, maybe you who didn't have access to the privileged information he was supposed to keep in confidence. When confronted by that reality, Levine just fudges.

In one of the most obnoxious passages in the book, Levine describes how he and his wife explained to his tearful young son why daddy was going to prison. He makes sure to include a few lines about how he "didn't hurt anybody" but merely "broke some business rules." Dragging his poor child into this story was bad enough, but describing the lies he told to the boy makes it all the worse,

At times it seems that, despite his years in prison, Levine still hasn't figured out the law. Take just one self-contradictory scene. When Boesky approached Levine about paying him for information, Levine writes that he was "shocked" that the stock speculator would make such an offer. "I wanted no part of it," Levine piously writes, even though he was already swapping information with other friends and colleagues, and then trading illegally through his own account at Bank Leu in the Bahamas. Why should Levine be willing to make money off crimes with some Wall Streeters but be offended when the biggest fish of all wants to play the same game?

One page later, Levine tips his hand to his own legal blindness. "The more I pondered, the more I wondered why I had been so reluctant to accept Boesky's offer. If he was going to make a fortune off my information, why shouldn't I enjoy a slice of his pie?"

Wait a minute. Why was Levine, an investment banker trained to know the meaning of fiduciary duty, feeding information worth "a fortune" to a stock speculator? Whether he is paid for the information or not, knowingly passing on nonpublic information about a publicly traded company is a crime. So, according to this version, Levine was seemingly willing to commit a crime with Boesky for free, but he was offended at the suggestion that he profit from it.

Throughout the book, Levine's newfound morality comes up short. Levine insists he did not trade on the inside based on greed. Yet when he writes that officers of Bank Leu violated his instructions by placing his orders through a single broker to cut their commission costs, Levine cannot control his complaints about missing out on the savings. His high morality breaks down even further as he criticizes the bankers for essentially failing to obstruct American justice on his behalf. When Bank Leu turns over Levine's name to the Securities and Exchange COmmission, he cannot hide his contempt. By God, those bankers violated Bahamian law, the American felon rails over and over. "I was incensed by the behavior of the Bank Leu officials," he writes.