Days Later
Six days later, Walters telephoned the third person for one minute, and the next day that person bought 1,000 shares of Dean Foods, according to prosecutors.
Prosecutors also refer to someone else who owed a gambling debt to Walters. They spoke by phone and texted in July 2012 before the person bought 240,000 shares in Dean Foods, using three brokerage accounts. The person had never previously traded in the stock and earned a profit of about $931,000, prosecutors said.
Davis resigned from his post without explanation last year and said he’s been cooperating with the government. The scheme ran from 2008 to 2014, and Davis also gave tips to Walters about Darden Restaurants Inc., the Orlando-based owner of the Olive Garden restaurant chain. Walters earned profits of $32 million and avoided losses of $11 million by trading on tips about the company, prosecutors said.
Davis testified falsely to the SEC on May 18, 2015, according to a charging document known as a criminal information. Prosecutors said he lied when asked if he gave non-public information to Walters and said: “I never gave him any confidential information. I’m quite certain about that.”
Securities Fraud
Davis was charged with conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities fraud, wire fraud, perjury, and obstruction of justice. A criminal information often precedes a guilty plea.
Walters, who was indicted by a grand jury, was charged with conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities fraud and wire fraud.
A voice-mail message left with Dallas-based Dean Foods wasn’t immediately returned.
U.S. Attorney Preet Bharara will hold a press conference at noon, according to a press release issued on Thursday.