Carl Icahn Cited in Billy Walters Trial as Prosecution Pushes for Submission of New Evidence

As the insider trading trial of Las Vegas gambler Billy Walters swung into its second week on Monday, Carl Icahn’s name was once again dragged into proceedings.

Icahn, the billionaire activist investor, owner of the Tropicana Casino and two shuttered former Trump casinos in Atlantic City, and unpaid adviser to the President of the United States, is a friend of Walters’.    

This is the biggest insider trading case in years. Walters is accused of making $43 million from illegal stock market trades on the Dallas-based dairy producer Dean Foods. Former Dean Foods chairman, Tom Davis is accused of feeding privileged  information to Walters over a seven-year period.

Davis is testifying against his former friend as part of a plea bargain with federal prosecutors after admitting charges including securities fraud and wire fraud.

It’s also alleged that Walters shared insider information, obtained from Davis, with his friends, including the golfer Phil Mickelson, whose lawyers have said would “take the fifth” if he were called as witness.

Neither Mickelson nor Icahn are accused of any wrongdoing, but the prosecution is leaning on the judge to permit it to include additional evidence surrounding trades by Walters in relation to cleaning products maker Clorox’s stock in 2011.

Prosecution lawyers claim that Walters might have made the trades based on tips received by Icahn, although there is at present no suggestion they were illegal. It is merely known that Walters and Icahn communicated shortly before the stock was purchased, but there is no evidence that the two men discussed Clorox stock.

There have also been insinuations about trades by Walters in Apple stock, but these are unlikely to see the light of day in the courtroom.

Prosecutors told the Judge P Kevin Castel in a conference Monday that they wished to introduce the new evidence in order to establish a pattern of suspicious trading by Walters.   

“Tell me what you have here,” asked Castel. “What are you going to show that it is more than smoke?”

“We would like the jury to know that getting this sort of an edge, he has done it in other stocks as well,” said prosecution lawyer Michael Ferrara. “We’d like to say there’s some other suspicious trading as well.”

Jonathan Streeter, a lawyer for Icahn said in an emailed statement to the New York Times that his client “has never done anything improper with respect to Clorox, Apple or any other stock.”