Former Dean Foods chairman subject of SEC, US Attorney's Office insider trading probe: Reports

By Mark ASTLEY contact

- Last updated on GMT

Former Dean Foods chairman subject of SEC, US Attorney's Office insider trading probe: Reports

Related tags: Dean foods, Stock

US authorities are reportedly investigating whether former Dean Foods chairman, Tom C Davis, leaked information about the company’s 2012 spin-off of WhiteWave Foods to a professional gambler. 

The Wall Street Journal reported yesterday​ that the Securities Exchange Commission (SEC) and US Attorney’s Office in Manhattan are probing claims Davis, who resigned as chairman of Dean Foods last week, tipped off William Walters about the share sale.

Walters, a professional gambler, is in turn suspected of tipping off US golfer Phil Mickelson about the spin-off of WhiteWave Foods. 

Dean Foods completed its spin-off of shares in WhiteWave Foods, which produces Horizon Organic milk, in May 2013. 

The US Attorney's Office in Manhattan and the SEC declined to confirm or deny they are investigating Davis when approached by DairyReporter.com.

In a statement, Jamaison Schuler, spokesperson, Dean Foods, said it “has cooperated with the government’s requests for information and will continue to do so.”

“Because there is an ongoing government investigation, it would be inappropriate to comment further at this time,” ​Schuler added.

Cooperating "without reservation"

Davis resigned as chairman of Dean Foods last week without explanation after 14 years with the Dallas-based dairy.

Earlier this week, during a call with analysts, Gregg Tanner, CEO, Dean Foods, refused to be drawn on the reasons for Davis’s sudden departure.

“Well I appreciate the questions,”​ said Tanner, “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.”

In a statement sent to DairyReporter.com, Tom Melsheimer, the Dallas lawyer representing Davis, said his client left Dean Foods voluntarily and has been cooperating with the SEC. 

"After 14 years of distinguished service on the board of directors of Dean Foods Company, Mr Davis voluntarily decided to step down from the board last week. He wishes his colleagues at Dean Foods well and believes he is leaving the company in good hands with an excellent management team," ​said Melsheimer.

"Separately, Mr Davis 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,"​ he added.

New chairman

Yesterday, Dean Foods named Jim Turner – a member of the dairy’s board since 1997 - as its new chairman.

“Jim’s a proven leader with extensive beverage industry experience; he has long been a valuable voice on our Board and is an ideal Chairman to lead us forward,”​ said Tanner.

“I am more optimistic than ever about the future of Dean Foods, and I look forward to working closely with Jim to continue to drive shareholder value," ​he added.

Related topics: Manufacturers, Dean Foods, Fresh Milk

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