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SEC Charges a Professional Sports Gambler and a Board Member for Insider Trading

The Securities and Exchange Commission (SEC) today announced insider trading charges against a professional sports gambler who allegedly made US$ 40 million based on illegal stock tips from a corporate insider who owed him money. The SEC alleges that the sports gambler, William “Billy” Walters of Las Vegas, was owed money by then-Dean Foods Company board member Thomas C. Davis.  According to the SEC complaint, Davis regularly shared inside information about Dean Foods with Walters in advance of market-moving events, using prepaid cell phones and other methods in an effort to avoid detection.  The SEC further alleges that while Walters made millions of dollars insider trading using the confidential information, he provided Davis with almost US$ 1 million and other benefits to help Davis address his financial debts.

The SEC complaint also alleges that professional golfer Phil Mickelson traded Dean Foods’s securities at Walters’s urging and then used his almost US$ 1 million of trading profits to help repay his own gambling debt to Walters. Walters and Davis are charged with insider trading, and Mickelson is named as a relief defendant. Relief defendants are not accused of wrongdoing but are named in SEC complaints for the purposes of recovering alleged ill-gotten gains in their possession from schemes perpetrated by others. In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Walters and Davis.

News Characteristics

Date : May 20, 2016
Region : North America
Industry : Capital Markets
Function : Risk Management
Sub-Function : Fraud Management