FBI agent David Chaves has been accused by federal prosecutors of leaking confidential information about the insider trading case involving Phil Mickelson and famed sports gambler Billy Walters to the New York Times and Wall Street Journal.
Per Reuters, Chaves is said to have admitted last month to having been a “significant source” to the newspapers in their 2013 and 2014 stories. The leaks are now under the jurisdiction of the Justice Department; presently, Chaves has not been charged.
The case involves alleged insider trading on the stock for Dean Foods. Walters is alleged to have made over $40 million on a fortuitously-timed trade. Mickelson, who was not charged with wrongdoing, paid back a little over $1 million that the SEC alleged he had earned trading the stock.
Lawyers for Walters and Mickelson did not respond to Reuters’ requests for comment, but the story said that Walters’ lawyers “are meanwhile expected to seek the case’s dismissal as a result of the leaks.”
As an aside, I found this story on a speech Agent Chaves gave to Chicago traders about insider trading and the FBI’s tactics in stopping it to be interesting:
The FBI will follow individuals, travel with them on the train, the bus, the subway as well as get a gym membership and lift weights next to them, including following them to get coffee at Starbucks. He said their investigation of a target leads to the FBI knowing more about them than their wife. “We know how they like their coffee,” he said. When it’s time to move in, Chaves said a favorite tactic is to follow the target to Starbucks and just before they order, break ahead of them in line and order for the target. “He’ll take a black coffee two creams, no sugar,” he said. The next move is to say to the target: “I’m with the FBI, I know how you like your coffee (and much more). Why don’t we sit down and talk?” Then the target is given a few options. Either they can cooperate or the FBI will be rudely knocking on their door in a week at 6 AM in the morning – the preferred time to arrest an individual – and the conversation with a warrant in hand that will take a different tact.
Additionally, this talk he gave about how to identify liars is also interesting.