Blog: Dean BestDean Foods' now ex-chairman subject of trading probe

Dean Best | 13 August 2015

Thomas Davis, the former chair of US milk giant Dean Foods, is reportedly being investigated over whether he tipped off a professional gambler - who then told golfer Phil Mickelson - about the company's spin-off of WhiteWave Foods.

The Wall Street Journal said today the US Securities and Exchange Commission, and the Manhattan US attorney's office are looking into whether Davis passed information to Las Vegas gambler William Walters, who then, it is claimed, told Mickelson.

Dean Foods announced Davis was stepping down as chairman on Friday, although no reason was given for his departure.

Analysts pressed Dean Foods CEO Gregg Tanner on Davis' exit on Monday when the company announced its second-quarter results, claiming investors were concerned. Tanner said: "I appreciate the questions, but I really have nothing further that I can add other than the fact that we feel more optimistic than ever about the future of Dean Foods. But no I can’t provide any additional colour to that."

The WSJ said Davis' resignation was voluntary, according to his lawyer, who added the former Dean Foods chairman has "fully and without reservation cooperated with the SEC in their investigation of alleged insider trading in Dean Foods Company stock from day one. He has no knowledge of any material non-public information about Dean Foods Company being conveyed to Mr. Walters by him or anyone else".

Last year, the SEC and the FBI investigated whether activist investor Carl Icahn and passed information to Walters on FMCG group Clorox and whether the gambler passed that on to Mickelson.

Ichan called the claims "inflammatory and speculative", the WSJ said. Walters insisted last year it would be "preposterous to think that I would involve myself in insider trading". Mickelson has denied any wrongdoing in the past.

The claims involving Icahn are now largely dormant, sources told the Journal.

Today, Dean Foods announced it had appointed a new chairman, long-standing director Jim Turner.

Sectors: Dairy

Companies: WhiteWave Foods, Dean Foods

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