For Young, Trouble Beyond His Years

Of all the villains in Den of Thieves, James B. Stewart's 1991 expose of insider trading on Wall Street, the most unlikely may have been a second-year Harvard Business School student named Randall Cecola.

In a world of Ivan Boeskys and Michael-Milkiens, Cecola, an analyst at Lazard Freres, wasn't much of a criminal, but he was no angel either. He used inside information to trade stocks in his girlfriend's name, and supplied another investment banker with tips gleaned from his work at Lazard, according to Stewart.

He also got caught. After being indicted in 1987, Cecola pled guilty to one count of tax evasion for not reporting his insider trading profits, and was slapped with a $21,800 fine by the Securities and Exchange Commission. The Business School, which he was attending at the time of the indictment, suspended him with the right to reapply.

Now, six years later, history may be repeating itself.

Last week, Daniel K. Young, a second-year Business School student, was indicted by a New York state jury on charges that he engaged in insider-trading activities while working as a trader at Manufacturers Hanover Trust Company in 1990. He has 30 days to pay the Federal Reserve a fine of $500,000--the amount of money investigators say he made from the alleged trading.

Young, who pled not guilty, could get up to four years in jail for felony charges of bribery and violating banking laws and misdemeanor counts of conspiracy. He is free on $25,000 bail.

The indictment will likely cost him his career. The Fed has initiated proceedings to bar him from ever working in the banking profession again.

And like Cecola, Young, 30, may have lost his chance at a Harvard diploma. Senior Associate Dean for Educational Programs Thomas R. Piper said Young, who has completed all his course requirements, will not get a diploma until his legal proceedings are complete. If he is found guilty, it is likely that he will never receive a degree.

"Until the legal proceedings are resolved we will not be in a position on whether to award him a degree," Piper said. "We, of course, take any sort of misconduct extremely seriously, but we also believe due process is important."

Interviewed by phone Friday at his home on Long Island, James A. Young, the student's father, said his son had been lobbying Harvard very hard to change its mind and award him a degree on Commencement day, June 10, with the rest of his Business School class.

But whatever the particulars, the Young case, like the Cecola indictment, represents an embarrassment to a school that prides itself on its commitment to teaching ethics. Young, like all other students, was required to take a class in the subject.

Young, whose Harvard number has been disconnected, has left few clues around the University as to the nature of his dealings. Students interviewed in his Morris Hall entryway said last week that they did not know Young and hardly ever saw him in the dorm.

There are indications, however, that Manufacturers Hanover, and perhaps the Business School, knew about allegations of wrongdoing by Young before he enrolled at Harvard in the fall of 1991.

Two sources familiar with the case said last week that Manufacturers Hanover was tipped off in December, 1990, to what one source called "ethical problems" with Young's handling of a Colombian debt deal in November, 1990. As a result, Young was forced to resign on Christmas Eve of that year, and he lost a Christmas bonus of an unspecified amount.

The sources said Young had been accepted by the Business School at the time of his resignation, and deferred his enrollment until fall 1991. After the resignation, he left to do volunteer work in Chile.

But his work with the Colombian debt did not end there. In March 1991, the indictment charges, Young set up a company, Y & A Holdings "as a vehicle for Daniel Young and others to profit from the Colombian asset and other [less developed country] debt."

Official explanations of Young's record at Manufacturers and his communications with the Business School have been non-existent. Piper and other Business School officials were tight-lipped on the specifics of Young's case, and officials at Chemical Bank, which now owns Manufacturers Hanover, also declined to answer specific questions about the case last week.

After graduating from the University of Pennsylvania in 1985, Young went to work at Manufacturers, becoming a senior trader and vice president who worked in a special unit to invest and trade debts of for- eign companies.

The indictment charges that he induced Manufacturers to sell a stake in Colombian debt to Tritech, a company in which Young allegedly had a financial interest, because Young knew the debt was about to be restructured.

Tritech's exact financial status is unknown. But in a March article, Harbus, the Business School's student newspaper, quoted sources familiar with the Young case as saying that Tritech may have been involved with BCCI, an international bank which laundered billions of dollars between foreign governments and overseas bank accounts.

In an apparent attempt to distance the Business School from the indictment, a spokesperson for the school told the New York Times last week that the activities for which Young was indicted occurred in 1990 and 1991 before he was a student at the school.

The indictment, however, directly contradicts that statement and lists three transactions made by Y&A in the 1991-92 academic year, while Young was a student here. Business School spokesperson Loretto F. Crane, the only school employee authorized to speak with the press, did not return repeated telephone calls on Friday.

Despite their silence, Crane and others know that Young, like Cecola before him, is no ordinary Business School student. Both have played in the same den as many of the biggest thieves in the world of finance

The indictment charges that he induced Manufacturers to sell a stake in Colombian debt to Tritech, a company in which Young allegedly had a financial interest, because Young knew the debt was about to be restructured.

Tritech's exact financial status is unknown. But in a March article, Harbus, the Business School's student newspaper, quoted sources familiar with the Young case as saying that Tritech may have been involved with BCCI, an international bank which laundered billions of dollars between foreign governments and overseas bank accounts.

In an apparent attempt to distance the Business School from the indictment, a spokesperson for the school told the New York Times last week that the activities for which Young was indicted occurred in 1990 and 1991 before he was a student at the school.

The indictment, however, directly contradicts that statement and lists three transactions made by Y&A in the 1991-92 academic year, while Young was a student here. Business School spokesperson Loretto F. Crane, the only school employee authorized to speak with the press, did not return repeated telephone calls on Friday.

Despite their silence, Crane and others know that Young, like Cecola before him, is no ordinary Business School student. Both have played in the same den as many of the biggest thieves in the world of finance