NEW YORK — A U.S. District Court judge here approved, after a week's delay, a $150,000 settlement of civil insider trading charges against Michael N. David, formerly a lawyer in the firm of Paul, Weiss, Rifkind, Wharton & Garrison.
The Securities and Exchange Commission had charged David with having tipped off a circle of young friends and associates to impending corporate takeovers in which senior lawyers in his firm were involved.
The settlement requires David to pay the money, representing his $50,000 profit from the scheme and a $100,000 fine, in installments over a 10-year period. Earlier, Judge David N. Edelstein had balked at approving the settlement because it bore no provision enforcing its terms if David were to miss a payment.
In the new version approved by Edelstein, any default by David will render the entire amount due and payable. At that point, David's failure to make the payments could render him liable for penalties including criminal contempt charges, an SEC official said.
In a separate case, two individuals charged with participating in the insider trading ring of former investment banker Dennis B. Levine will appear in federal court here Monday.
Robert M. Wilkis, 37, a former investment banker at the firms of Lazard Freres & Co. and E. F. Hutton & Co., and Randall D. Cecola, 25, a former financial analyst at Lazard, are scheduled to waive indictments and enter pleas to charges.
Wilkis and Cecola were allegedly participants in the same insider trading ring in which stock speculator Ivan F. Boesky was involved.
Two others involved in the ring have admitted criminal charges--Ira B. Sokolow, a former investment banker at Shearson Lehman Bros. who earlier this month began serving a jail term of a year and a day, and David S. Brown, a former employee of Goldman, Sachs & Co.
The SEC charged in June that Wilkis made more than $3 million in insider trading starting in 1978. Wilkis and Levine exchanged inside information with each other, the commission charged, and both profited from each other's tips. Wilkis allegedly was also the original source of at least one tip that enabled Boesky to turn a $4.1-million profit on an otherwise secret transaction, the 1985 takeover of InterNorth by Houston Natural Gas.
Wilkis settled the SEC civil charges, without admitting or denying them, by forfeiting $3.3 million in cash and assets.