Ex-Dean Foods chairman, gambler charged for insider trading; Mickelson settles

Thu May 19, 2016 9:01pm EDT
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By Nate Raymond and Jonathan Stempel

NEW YORK (Reuters) - U.S. authorities on Thursday charged a former chairman of Dean Foods Co and a professional Las Vegas gambler with engaging in an insider trading scheme that netted more than $40 million and included a tip that benefited professional golfer Phil Mickelson.

William "Billy" Walters, who has built a multimillion-dollar fortune as a famed Las Vegas sports bettor, was accused in an indictment filed in Manhattan federal court of trading on tips from Thomas Davis, Dean Foods' former chairman.

"These bets were no gamble at all," Manhattan U.S. Attorney Preet Bharara said. "They were sure things."

Mickelson, who has won three Masters golf titles, was not criminally charged.

But in a civil lawsuit by the U.S. Securities and Exchange Commission, he was named as a relief defendant, not accused of wrongdoing but of receiving ill-gotten gains as a result of others' illegal acts.

Mickelson agreed to pay back $1.03 million, including profit and interest, to resolve claims from his role in the scheme.

The SEC said Mickelson, 45, owed Walters money after placing bets with him. It said that at that time, Walters, aware of a Dean Foods corporate spin-off, urged Mickelson to trade in the company's stock, enabling the golfer to earn $931,000 of profit.

"Simply put, Mickelson made money that wasn't his to make," said Andrew Ceresney, the SEC's director of enforcement.   Continued...

Andrew Ceresney, Director of SEC Enforcement division, speaks during a news conference regarding Las Vegas sports bettor William "Billy" Walters and Dean Food's former chairman Thomas Davis, both charged with insider trading, in New York City, U.S. May 19, 2016.  REUTERS/Brendan McDermid