Thomas C. Davis admitted to passing inside information to Las Vegas gambler Billy Walters for at least six years Former chairman of Dean Foods Co., Thomas C. Davis, leaves federal court in New York earlier this year. A judge on Thursday sentenced Mr. Davis to two years in prison for insider trading.PHOTO:LOUIS LANZANO/BLOOMBERG NEWS By Nicole Hong Updated Oct. 19, 2017 6:14 p.m. ET 7COMMENTS A federal judge on Thursday sentenced Thomas C. Davis, the former chairman ofDean FoodsCo., to two years in prison for engaging in a long-running insider trading scheme with legendary Las Vegas gambler William “Billy” Walters. Mr. Davis, 68 years old, pleaded guilty last year to 12 criminal counts, including securities fraud, wire fraud, obstruction of justice and perjury. Mr. Davis cooperated with prosecutors and testified for five days at Mr. Walters’s trial as the star government witness. Mr. Davis admitted to passing inside information about Dean Foods to Mr. Walters for at least six years, including projections about earnings and company plans. By trading on the tips, Mr. Walters benefited by approximately $45 million in profits gained and losses avoided, which prosecutors have called “almost unprecedented” for an individual in an insider-trading scheme. On Thursday, U.S. District Judge P. Kevin Castel said Mr. Davis committed the crime not for greed, but to enhance his status. “Mr. Davis paraded through Dallas as a peacock, accepting the friendship of other CEOs…when he was a phony, a fraud and a crook who knew better,” Judge Castel said. At trial, when asked why he began giving inside information to Mr. Walters, Mr. Davis said he thought “it would eventually accrue to my benefit somehow, whether it was through gambling tips or business transactions that he might share with me.” The two men met at a golf tournament in the mid-1990s and became friends over their shared interests in sports and gambling. Although Mr. Davis received no share of the trading profits, he received two loans from Mr. Walters for approximately $1 million that were never fully paid back, according to prosecutors. At Thursday’s sentencing, Judge Castel questioned whether Mr. Davis was truly remorseful, pointing to a trip to Las Vegas that Mr. Davis took six days after his guilty plea in May 2016. Mr. Davis’s lawyer said he lost $10,000 gambling on that trip. “If one is genuinely remorseful…why are they gambling with money that could go to pay down restitution obligations?” Judge Castel asked. Benjamin Naftalis, a Latham & Watkins LLP partner who represents Mr. Davis, said the judge had approved the trip. Judge Castel quickly responded, “I don’t think I approved a gambling junket.” Mr. Naftalis declined to comment after the sentencing. Mr. Davis has said he started cooperating with the government after a series of health scares in late 2015 gave him perspective and made him want to take responsibility for his conduct. At trial, the defense tried to undermine Mr. Davis by portraying him as a liar. Mr. Walters’s lawyers produced phone records that showed frequent calls from Mr. Davis to escort services, saying this conflicted with Mr. Walters’s statements to the government that he had not paid for sex while he was with his third wife. She has since filed for divorce. One of the most valuable parts of Mr. Davis’s cooperation was the details he shared about a burner phone that Mr. Walters gave him to share tips. Mr. Walters allegedly called it the “bat phone” and told Mr. Davis to refer to Dean Foods as the Dallas Cowboys. After Federal Bureau of Investigation agents showed up at Mr. Davis’s house in 2014 and asked about his ties to Mr. Walters, Mr. Davis threw the burner phone in a creek near his house, leading to a charge of obstruction of justice. Mr. Davis’s lawyers said prosecutors had spent years investigating the case and were having trouble bringing it until Mr. Davis offered them new leads and clues. Mr. Davis also pleaded guilty to perjury because he lied during a 2015 deposition with the Securities and Exchange Commission by denying his involvement in the conspiracy. Mr. Walters, who was also subpoenaed for an SEC deposition, invoked his Fifth Amendment rights and declined to testify. Mr. Walters was convicted by a Manhattan federal jury earlier this year. Judge Castelsentenced him to five years in prison. In a speech to the court Thursday, Mr. Davis said, “I know there’s no one to blame but myself at the end of the day.” Write toNicole Hong atnicole.hong@wsj.com https://www.wsj.com/articles/former...ears-in-prison-for-insider-trading-1508448589
Wow ..I wasn't even aware there was a trial . At least he took responsibility and didn't blame it on the Russians
“If one is genuinely remorseful…why are they gambling with money that could go to pay down restitution obligations?” Judge Castel asked. Who gets the restitution in a case like this?
Wow, $45M from insider trading of a breakfast sausage company. Based on how these 'ole country boys look I would have figured they would have traded info on a fax machine or pony express lol....
Convicted Sports Bettor Billy Walters $25 Million Insider Trading Appeal Rejected by US Supreme Court (Casino.org) Walters, 73, was found guilty in April 2017 of obtaining privileged information from Tom Davis, the former chairman of America’s largest dairy producer, Dean Foods, in order to profit from illegal trades in the company’s stock. He was also ordered to pay a $25.4 million penalty, which was the amount that could be definitively traced to his insider trading, though prosecutors suggested his true profit could have been as much as $43 million.