It Pays To Have Experience On Your Side.
free consultation917-639-5370

SEC v. Walters and Davis gives two lessons on securities cases

The Securities and Exchange Commission (SEC) is accusing professional sports bettor, William "Billy" Walters, and the former director of Dean Foods Company, Thomas Davis of securities fraud.

The complaint states that Walters received confidential information from Davis about the profitability of Dean Foods. Such information included figures from earnings announcements and spin-off projects. This confidential information was allegedly given to Walters, who then made securities trades based on these tips. In exchange, it is claimed that Walters helped Davis pay off various gambling debts.

This case brings attention to two big lessons for those facing similar allegations: the impact of the Newman case and the potential for secondary charges.

Impact of United States v. Newman

United States v. Newman was an earlier case that will likely impact most future insider trading disputes. It was decided in 2014, and involved a federal appeals court that overturned an insider trading conviction.

The ruling makes it difficult to prove that confidential information was "tipped". The case established that the government must show that the person getting the information, the tippee, knew that the tipper was getting some sort of a benefit from giving the tippee the information.

Essentially, the holding requires that more than just a friendship be present for a tip to reach the level of insider trading.

If insider trading charges fail, other charges may still exist

The SEC v. Walters and Davis case also provides an example of how the government will likely have a back-up plan when pursing insider trading charges. If the insider trading charges in this case fail, the government has also filed secondary charges for wire fraud. This crime is generally easier to establish. Such back-up charges are not uncommon.

No Comments

Leave a comment
Comment Information

Honors and Memberships

Super lawyer American college trial lawyers The national trail lawyers AV Preeminent
Contact us

contact our law firm

If you are facing a criminal charge or securities dispute, it pays to have experienced lawyer on your side. Contact us today online or by telephone at 917-639-5370 to speak with an experienced New York City defense lawyer.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

New York
Bachner and Weiner PC

New Jersey
Bachner and Weiner PC

New York Office
39 Broadway, Suite 1610
New York, NY 10006

Phone: 917-639-5370
Phone: 212-344-7778
Fax: 212-344-7774
New York White Collar Crimes Office

West Caldwell Office
New Jersey Office
175 Fairfield Avenue, Suite 3D
West Caldwell, NJ 07006

Toll Free: 877-388-6461
Phone: 212-344-7778
Fax: 212-344-7774
Map & Directions