A week after Tom C. Davis resigned unexpectedly and without explanation as chairman of Dean Foods Co.'s board of directors, reports surfaced he was being investigated in connection with insider trading, which could involve golfer Phil Mickelson and a Las Vegas gambler.
Bloomberg News quoted Davis' lawyer as saying the former chairman is cooperating with the Securities and Exchange Commission, and that he had no knowledge of any non-public information about Dean Foods being communicated to Mickelson or gambler William “Billy” Walters. Bloomberg also said the FBI is also looking into the matter.
The two agencies and prosecutors in New York were reviewing Dean Foods stock trades made in 2012 just as the company was preparing to spin off its organic milk and nondairy "milks" into WhiteWave Foods Co. Walters and Mickelson haven’t been accused of wrongdoing.
“Dean Foods has cooperated with the government’s requests for information and will continue to do so,” the company said in a statement to Bloomberg. “Because there is an ongoing government investigation, it would be inappropriate to comment further at this time.”
Dean Foods announced Davis' resignation on Aug. 7. In an earnings call three days later, CEO Gregg Tanner dodged questions about why. On Aug. 12, Jim L. Turner, who has been on the board since late 1997, was named chairman.
Turner is the principal of JLT Beverages LP and the owner and CEO of JLT Automotive Inc. He was president/CEO of Dr. Pepper/Seven Up Bottling Group from its formation in 1999 through June 2005 when he sold his interest in that company. Prior to that, he was the owner and CEO/chairman of Turner Beverage Group, the largest privately owned independent bottler in the U.S.
He's also a member of the Texas Rangers Baseball Club ownership group.
Davis is a Dallas-based investment banker who had been on the Dean board since 2001. He stepped up when then-Chairman Gregg Engles went with WhiteWave Foods at the time of the split.