Mickels mickelsons attorney who says that phil is not charged with Insider Trading and phil is an innocent bistander to others that he was doing something that is not something that he was aware of, but they say it is a tip from gambler Billy Walters who was receiving information from the former dean foods chairman thomas davis who is suffering Financial Difficulties and received some loans from walters and allegedly tipping walters to insooider informatio about the dean foods at several different corporate events. Walters made trades on those and took advantage of the information in other ways according to the u. S. Government, and there is a lot here sh, melissa, and we will g to the bottom of it as soon as we get the bottom of it. And this is a long running crime, eamon, because it is between 2008 and 2014, and during this time frame, according to the allegations, walters made 32 million and avoided 11 million in trading losses. There is a lot more coming out of the documents released so far this morn, and including the scheme that were apparently hiding the tracks by prepaid cell phone, and code phrases likeb the words Dallas Cowboys to refer to dean foods when talking about the trading tips, and that sort of thing. And also in allegation here, the s. E. C. Says that davis, the former dean foods chairman misappropriated funds for a c r charity for battered women to repay gambling debts he e owed in las vegas, so it seems that there is a lot more here besides the Insider Trading allegation, and we will see what details the government brings to us in the News Conference in in a few minutes. As soon as preharra speaks, will bring that to you. And at one point in the session, we are down 0. 08, and what are you seeing with this slight pairing of losses . Well, is it is the oil that is rallying a good 50 cents here in the last ten minutes or so, and so this is a lot of the folks out there playing for the apocalypse this morning on the morning and that is the wrong move to the make, and in terms of the near term rally, it is oil itself, and the decline today is orderly. I dont believe it is, and i dont know the volatility side of it, but we are selling off, and it is really not in a chaotic fashion. Sure. And the sell offs are sello selloffs and the losses are losses, and this is the fed that is actually Preet Bharara is speaking. Today, we announce charges against Billy Walters known in the gambling oworld, and tom davis, the former chairman of the board of dean foods which is a fortune 500 company which is the largest producer and distributor of fresh milk. The defendants are charged with participating in Insider Trading scheme that is fairly remasrkabe in duration and inp scope. As alleged for over five years davis repeatedly and systematically fed material nonpublic information about dean foods to walters who in turn benefited hand somely to the tune of 43 million in profits made and in losses avoided from his trading in the dean foods stock. With the direct channel into dean foods board room, walters place placed enormous bets on the stock, but described in the indictment, the bets were no gamble at all, because they were a sure thing, because armed with inside information from davis, walters traded in advance of good news and bad news alike, and it was all good news for walters, because he had the information before everyone else. He had tomorrows headlines today. As we allege on at least ten occasion, walters traded on the material nonpublic information and at one point on one day, this single investor accounted for 37 of all of the Trading Volume in dean foods stock. 37 on one day. As also alleged walters and davis made efforts to cover up the conduct, and walters supplied davis with anonymous prepaid cell phone specifically for the purpose of communicating inside information about dean foods. Walters and davis also used coded language as we allege to hide from Law Enforcement, including referring to dean food s in the illegal conversations as the Dallas Cowboys. We also allege that davis provided material nonpublic information about darden restaurants, and allowing walters to make 11 mi million profit on that illegal scheme. In addition to the participation in the criminal scene, mr. Davis has plead guilty and cooperating with the governments case. Walters was arrested yesterday in las vegas, and we are spect to walters, this is allegation, and he has a presumption of innocence, and he has a credible lawyer, and this is going to be playing out in court. Now, some specifics about the charges. At the alleged criminal scheme began in 2008 and continued through 2014. During this time, davis provided wa walters with the full spectrum of nonpublic information that is vitally important to investors. Information about earnings, financial performance, internal forecasts, and proposed mergers and acquisitions. Let me highlight one series of trades for now. Between 2010 and 2012, davis allegedly gave walters secret updates about dean foods plans to spin off white wave, successful organic dare the ri business that ultimately separated from dean foods in 2012. On april 9th, 2010, at a meeting in las vegas, davis we allege tipped walters about how dean foods had engaged in an Investment Bank to explore the spinoff of white wave. That tip was provided on the very same day that walters arranged a 625,000 loan for davis. And the very next business day, april 12th, walters purchased 1 million shares of dean foods followed by another 510,000 shares on april 14th and 15th. Some of that is depicted on the charts to my right as i said, and the spinoff there came on april 9th, 2010, and the same time that the loan is arranged for tom davis, and so it resulted in the buys of 1. 5 million shares of the an t anticipation of the potential spinoff. Along the way, there was a hiccup in how they were going to be doing, and that earnings was alleged to be passed on from davis to walters, and at that time, when we allege that the Billy Walters sold the entire stake that he had just accumulated 1. 5 million shares a few weeks later, and then once the back earnings news came out on or about may 10th, and dean foods stock price went down by 28 , walters ended up at that point walking away with 7. 3 million and what else . He rebought 11 million shares stakes that he had accumulated a few weeks earlier by not avoiding the loss, but reducing the cost of the shares and the investment for later gain in the spinoff with respect to that knowledge. By the way, the walters dumping of the shares was so sizable and anomalous that the trading made up 29 , and 16 respectively of dean foods entire Trading Volume on those days. So now, as the indictment describes fast forward to august 7th, 2012 when dean foods announces the plans to spinoff from whitewave, waltle lers wal positioned and thanks to the secret bug in the boardroom, he had loaded up on the stock, so in the days leading up to the the announcement, he bought 2. 8 million more shares to the increase the holdings to 4. 8 million shares of dean foods and then august 8th after the stock price rose 40 on the plans of the spinoff, walters position grew over 17 17. 1 million in value. Ultimately by october 12th when the ipo was priced, walters owned 1. 53 million shares of dean foods valued over 100 million, and the shares he ultimately sold through august 2013 for the Gross Proceeds of about 110 million. As you might expect a case of this type with the complexity and the significance requires close collaboration and coordination together and in parallel with the Law Enforcement part nrs and the representatives and some of them are standing up here with me today. I am joined by our partner in and so many other cases led by the fbi, and my friend the great Diego Rodriguez who is the executive in charge of the new york field office. I want to thank diego and the team for the great assistance in this investigation. I am also joined by the director of the s. E. C. , and their San Francisco office in particular for all of the work they have don done, and he is going to be speaking in a moment to talk about their separate case shortly. We are also joined by the Postal Inspection Service represented here by thomas boyle, and the assistance director here of the united Postal Service, and last but not least, i want to acknowledge my colleagues handling the case, and their supervisors, and the chief and deputy chief of the Commodities Fraud Task force. Brazen and Insider Trading continues to be a blot on the securities markets, and so the integrity of the markets continues to be a priority for this office. When the board member of a fortune 500 company feeds inside information to a professional gambler who makes a killing on welltimed trades in that very companys stock, that is a form of corruption. Corruption of our markets. We dont let corruption stand. I would like to bring to the podium, e Diego Rodriguez of the fbi thank you, preet. We have been listening to the u. S. Attorney Preet Bharara. And eamon, who stood out to me is the sizable volume of any given day of the trades made between 16 and 37 of a total days volume on a few different days. Yes, melissa, that is not subtle trading action here by Billy Walters. But you heard preet call it a remarkable in the duration and scope, and one of the questions is going to be why would former dean foods chairman thomas davis engage in this behavior with gambler Billy Walters. Well they lay out some rational saying that following the retirement from the Investment Banking, davis financial situation declined because the spending and the gambling habits did not change despite the lower income. He owed the irs, and credit card de debt, and trouble in the portfolio, and owed 550,000 to an Investment Fund that he managed. So if picture that is emerging is thomas davis desperate for the cash here, and engaging in the tipping behavior here to Billy Walters to recoup some of the shortfall here. So this is a person under severe financial duress according to the s. E. C. And they said that now, after pleading guilty and cooperating with the authorities, but what is interesting is this character walters, he is also under investigation if he received information from carl icahn regarding clorox. Yes, and his attorney said that the allegations are false, and he is going to be challenging them, so we will have to wait to hear more from him about his side of all of, this and the governments case here simply allegations here, and they will have to prove that in court. A lot of the deal is to be determined. What a juicy case. Eamon javers in d. C. , and of course, as you can see that the press conference is continuing, and we will follow the headlines of this Insider Trading news. This is what is come up on the Halftime Report though. And now, rally for an old stock that pete and jim still own. Find out if they are sticking with cisco. And from teslas 2 million stock takeover to what they are trading . And also, the latest on the egyptair flight that went missing over the mediterranean. We will bring you an update ahead on the Halftime Report. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive welcome back to the Halftime Report, and investigations are under way into the presume crash of an egyptair flight over the med tr mediterranean. They are not ruling out mechanical failures or terrorism. And white house say that president obama has been briefed on the crash and the investigation, and we of course, will bring you the latest developments as they happen. Meantime, back to the press conference where the Insider Trading is being outlined against billy davis and walt er. And now, on this chart, based on tips from davis in the months of may and july, and then at the end of july 2012 about one week before dean foods publicly announced the spinoff of the profitable subsidiary whitewave, walters contacted mickelson, and placed a bet with him and owed him money. They spoke and traded text on friday july 27th, and saturday july 28th, and walters urged in the discussions that mickelson trade in dean foods stock, and based on the discussions, mickelson bought 2. 4 million tlof a stock he had not purchased and he purchased with margin loans from the broker. Walters himself purchased 100,000 100,000 shares, and that was worth 153 million. And then after the markets closed, dean foods announced strong Quarterly Earnings and spinoff. The share price increased 40 . The next day, mickelson sold all of his dean foods shares for a profit of approximately 931,000 and using part of the proceeds from the trading windfall, mickelson repaid walters in september of 2012. You can see on this chart, the chronology as when it was purchased by walters of the stock, and the conversations between mickelson and walters on july 22nd. Mickelson purchased on july 30th, to 3 1st at the same time that walters buys stock, and then the announcement by dean foods, and ultimately the sale and then by september, mickelson using the proceeds to are repay walters the gambling debt that he owed him. Simply put, mickelson made money that wasnt his to make. The action against mickelson makes clear that we will pursue both those who engage in Insider Trading and those who profit from it. The bottom line is that todays action is brought to light an egregious and large scheme that reach into the highest levels of the courtroom. And davis breeched the law despite being in dire financial strait straits, and walters made at least 480 million based on the gambling of a sure thing. Todays actions would not have been possible without the efforts and the dedication of the important Law Enforcement officers. First the 71st district of new york which is very important pa partner against Insider Trading and the Securities Law violations general ly. I want to thank the federal bureau of investigation, and the postal inspection for their investigation, and finra in the tireless surveillancing of the vast markets. Finally, are let me recognize the fcc staff who are talent and okay. We are listening to the director of andrew serezzni saying that the golfer Phil Mickelson was involved in the scheme led by chairman of dean foods and a o professional las vegas gamble, Billy Walters. So walters after getting information from davis passed on by text to Phil Mickelson who has won three masters bought stocks, and then a profit he made 9311,0 931,000 in pro, and are repaid walters for this, and we know from Phil Mickelson, he will repay the profits that he is being accused of illwrongfully getting lets say. What is your reaction to this, because if you are a trader at home, you are thinking, that gosh, these guys, and how crooked can they be . And also, you nknow, forgive me, but how dumb can they be, and at this point, preet ba harer ra has anybody who is thinking of this lined up to be indicted. So you are going to be caught if you to this, and so dont do it. But the one thing that is sad is Phil Mickelsons involvement in it. He has not been charged. And im not casting the shade on him, but if you are in the public eye, be careful with whom you associate with, and but for this guy walters, he never would have gotten himself in this situation. And what is stunning is is the volumef of the trades that Billy Walters made on any given day surrounding the bad earnings or the whitewave spinoff and how it could not be disguised in the equities market, but we were talking about off camera how unusual there there are unusual activities and you never hear these charges . Well, he was right that some of the guys that have traded on the inside information about hilton for example when raj did that. And it is in the Options Markets in a very big way leading into the 4th of july holiday a few years ago, but you are right, mel, because these guys were so bold that they were casting anything aside to say, you know what, i want all that i can get. And most people doing this activity will try to the mask it with a burner cell phone, but by trying to make smaller trades across multiple days, and these guys were trading 37 a day, and ye yeah, you are going to be showing up on a lot of screens. And it is a problem with e ego, and who you associate with, to your point, jim, and what you do with any of the associates, and the fact that if you are going to get the insooideer information like apparently phil might have gotten, you have to discard that and say, you know what, that is great and now you cant touch it. You cannot touch it. He has all sorts of income streams, and why do this . And the press conference is going on, and we will monitor it, but meantime, back to the markets. Lets look at oil, because the intraday charts, and this is interesting reversal, because brent was down 2 , and now down less than a percent here, and this is probably why as you say that the markets have staged a little bit of the turnaround here off of the lows. 47. 90 for oil here, and that is clear areally the reason. And again, playing for the apocalypse because the Federal Reserve suggests that they are going in june, but i think that it is the wrong strategy. I agree,