U.S. prosecutors name FBI agent accused of leaking insider trading probe

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By Nate Raymond | NEW YORK

NEW YORK U.S. prosecutors on Wednesday
identified the FBI agent who they say admitted to leaking
information to reporters about an insider trading probe
involving a Las Vegas sports gambler and golfer Phil Mickelson.

David Chaves, a Federal Bureau of Investigation coordinating
supervisory special agent, was named in court papers filed in
Manhattan federal court as the agent prosecutors say leaked
details about the probe of gambler William “Billy” Walters.

Prosecutors have said the agent, who they previously had not identified, admitted on Dec. 6 to being a “significant
source” of information about the investigation in 2013 and 2014
for reporters at The Wall Street Journal and The New York Times.

Those newspapers published a series of reports beginning in
2014 about the investigation, two years before prosecutors in
May brought insider trading charges against Walters, who has
built a fortune as a sports bettor.

The leaks are now the subject of a criminal investigation by
the Justice Department’s Office of the Inspector General,
prosecutors disclosed Dec. 21. Walters’ lawyers are meanwhile
expected to seek the case’s dismissal as a result of the
leaks.

Chaves, who oversaw the FBI squad that conducted the
investigation, has not been charged in connection with the
leaks. His lawyer did not immediately respond to requests for
comment. A lawyer for Walters declined comment.

Chaves previously has been involved in several high-profile
securities fraud matters, including an FBI probe into insider
trading in the hedge fund industry dubbed “Operation Perfect
Hedge” that resulted in dozens of people being charged.

In Walters’ case, prosecutors say the gambler made more than
$40 million through insider trading on tips supplied by Thomas
Davis, the former chairman of Dean Foods Co.

The U.S. Securities and Exchange Commission in a related
civil case said Mickelson, who has won three Masters pro golf
titles, at one point bought Dean Foods’ stock on a
recommendation by Walters, to whom he owed money.

Mickelson was not accused of wrongdoing, but he reached an
agreement with the SEC to pay back $1.03 million the regulator
said he earned trading shares of Dean Foods. Davis has pleaded
guilty. Walters is scheduled to face trial on March 13.

Lawyers for Mickelson and Davis did not immediately respond
to requests for comment on Wednesday.

The case is U.S. v. Davis et al, U.S. District Court,
Southern District of New York, No. 16-cr-338.



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