IRS Entitled to Levine Money: The U.S....

IRS Entitled to Levine Money: The U.S. Court of Appeals in New York has ruled that the Internal Revenue Service, not investors, is entitled to most of the $11.5 million turned over by Dennis B. Levine as part of his settlement of federal insider trading charges. The court ruled that the IRS is entitled to at least $8.5 million of that amount and ordered a district court to determine the precise figure. “It means that investors are going to have their distribution substantially reduced,” said Thomas Newkirk, the Securities and Exchange Commission’s chief litigation counsel. “It could mean investors get virtually nothing.” Levine, the former Drexel Burnham Lambert merger specialist whose 1986 arrest signaled the longest-running insider trading scandal in Wall Street’s history, had settled SEC civil charges by agreeing to repay ill-gotten gains. The IRS believes that it has first rights to the $11.5 million because Levine failed to report profits earned from the illegal transactions.