U.S. officials have charged the former chairman of Dean Foods with passing inside information to Las Vegas sports bettor Billy Walters, in a case that also involves professional golfer Phil Mickelson.

Prosecutors say that between 2008 and 2014, Thomas Davis gave Walters information about the financial performance of his company that had not been made public.

In exchange, Davis received business opportunities, investment capital and $1 million in unpaid loans, according to court documents.

The two allegedly communicated via prepaid cellphones and used code words. "Dallas Cowboys" was said to have been code for "Dean Foods."

"Walters illegally reaped tens of millions of dollars with the benefit of the ultimate ace in the hole — confidential information leaked by a sitting board member of a public company," said Andrew Ceresney, director of enforcement for the Securities and Exchange Commission.

Some of the information was allegedly passed on to Mickelson, a three-time winner of the Masters golf tournament.

Walters called Mickelson, who owed him money, in July 2012 and told him to trade in Dean Foods stock, which he did the next day, according to the SEC. Within a few days, the company's stock soared on the basis of a stronger-than-expected financial performance

Although he has not been charged criminally, the SEC says Mickelson benefited from the information and the agency wants him to turn over $931,000 in what it deems illegal profits. His lawyer did not return calls seeking comment.

Walters, who is also a well-known philanthropist businessman, was arrested Wednesday at a Las Vegas resort. He is charged with securities fraud, wire fraud and conspiracy.

"Bill Walters is a true American success story, whose extraordinary accomplishments as a lawful sports gambler have been widely recognized and lauded," his lawyer, Barry Berke, said in a statement. Berke added:

"Mr. Walters and his counsel look forward to his day in court where it will be shown that the prosecutors' accusations are based on erroneous assumptions, speculative theories and false finger-pointing."

A lawyer for Davis told The New York Times that his client pleaded guilty on Monday and is assisting federal prosecutors.

The charges were filed by the office of U.S. Attorney Preet Bharara, who has aggressively pursued insider trading charges against Wall Street figures.

But those efforts were dealt a significant setback after an appellate court overturned a case against two hedge fund managers, ruling that the government had failed to prove they were guilty of insider trading. The ruling was upheld by an appeals court and the U.S. Supreme Court refused to review the decision.

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