Dive Brief:
- Dean Foods' former chairman Thomas Davis is being investigated for alleged involvement in an insider trading scandal, sources familiar with the case told The Wall Street Journal. Davis resigned from his post at Dean Foods just before the company's earnings report, released earlier this week.
- Davis is being accused of leaking inside information about Dean Foods' 2012 WhiteWave Foods spinoff to Las Vegas professional gambler William "Billy" Walters, according to the sources. Walters is then suspected of passing that information to professional golfer Phil Mickelson.
- Dean Foods would not comment but is cooperating with the investigation. Bloomberg also reported the investigation, citing un unnamed source.
Dive Insight:
This is an interesting turn of events at Dean Foods. Davis resigned unexpectedly, but "voluntarily," according to his attorney last Friday. There was no explanation from Davis or the company. All parties in the investigation claim no wrongdoing and say they are cooperating with the U.S. Securities and Exchange Commission.
Dean Foods has turned over copies of Davis's emails per a subpoena request, but no one has announced if investigators found anything, The Wall Street Journal's source said. The Journal also pointed out that these cases are more difficult due to a 2014 appellate-court ruling.