10 Biggest Insider Trading Scandals Ever to Rock Companies

5. Dean Foods Scandal

We are continuing our list of  biggest insider trading scandals ever to rock companies with the scandal number 5 – William Walters, a successful Las Vegas professional gambler, appeared on the SEC’s radar when their monitors discovered his large volume trading of Dean Foods Co (NYSE:DF)’s and Darden Restaurants, Inc. (NYSE:DRI)‘s shares. These trades looked highly suspicious and SEC investigators decided to dig deeper into them, quickly discovering that Walters was receiving information from none other than Thomas Davis, Dean Foods’ Chairman. Not only did Williams make a handsome profit from insider trading, he also used the information to tip off golfer Phil Mickelson, who owed him money at the time. Mickelson pocketed $931,000 by buying Dean Foods’ stock shortly before its spin-off of WhiteWave Foods Co (NYSE:WWAV), which sent its shares soaring. Mickelson then used the funds to repay Walters. While no criminal charges were brought against Mickelson, he did have to pay the gains back, with interest. Both Walters and Davis are currently on trial.

Dean Foods Co (NYSE:DF) recently announced that Ralph Scozzafava will take over as CEO beginning on January 1, 2017, replacing Gregg Tanner. Shares of the company are off by 10% since the beginning of August following disappointing second quarter results. However, Wells Fargo noted that those results were impacted by the company cutting several low-margin private label units. The investment bank is encouraged by the company’s third quarter guidance and likes it long-term. Dean Foods completed the acquisition of Friendly’s Ice Cream towards the end of June, which should help boost the company’s third quarter results. Dean Foods expected the purchase to be immediately accretive to EPS and margins. And now, let’s see what else we have in our list of biggest insider trading scandals ever to rock companies.