The insider-trading trial of Billy Walters initially looked to be a star-studded affair, one which might see the famed gambler in the dock with his friends Carl Icahn and Phil Mickelson. Now, it seems it will be a more ho-hum affair: Striking Mickelson’s most fawning fan from the potential jury appears unnecessary now that the champion golfer says he won’t be called as a witness, and Icahn’s link to the matter, always tenuous, proved to be another fusillade of fake news against the deregulator-in-chief, even if he didn’t know the term at the time.
But as the unindicted co-duffer fades from the tribunal, Icahn is coming back into the picture. Not as a witness, of course—we presume the federal prosecutors in Manhattan are under orders not to call President Trump’s buddy to the stand, and they are well aware of what happens when someone ignores such an order—but as a Tweeter. For while Walters is accused of illegally trading Dean Foods shares based on some black edge from the company’s former chairman—and not from Icahn, as originally believed—the government thinks he also did some illicit dealing in Clorox shares based on some pre-Tweeting tips from the billionaire. Prosecutors don’t have anything like enough evidence to bring charges based on those allegations, but argue that Walters’ lawyer opened the door to such speculation when noting that his client threw tens of millions of dollars around in stock trades all the time.
In a filing to Judge P. Kevin Castel on Friday, federal prosecutors said Mr. Walters had opened the door to new evidence when his lawyer, Barry Berke, told jurors that it was not uncommon for Mr. Walters to make “big bets” of “tens of millions of dollars at a time.”
Prosecutors pointed to Mr. Walters’s trading in Clorox shares in 2011, which had been previously reported….
“We would like the jury to know that getting this sort of an edge, he has done it in other stocks as well,” said Michael Ferrara, one of the prosecutors. “We’d like to say there’s some other suspicious trading as well.”
That evidence would include Icahn’s 140-character, market-moving musings on Apple and Clorox. Walters’ lawyer would like to keep Icahn out of the courtroom in any form, arguing that even if Icahn had alerted his client to his moves in those stocks before making them public, it wouldn’t actually prove anything, a sentiment that Icahn’s lawyer is happy to echo.
Over the weekend, Mr. Berke filed a response saying the government’s assertion was “pure speculation” and adding that prosecutors were seeking “to have the jury draw legal conclusions that are simply wrong….”
Mr. Berke denied that there had been any such conversation, adding that even if the two had spoken ahead of Mr. Icahn’s announcement, “there is no basis to suggest that would violate securities laws….”
Jonathan Streeter, a lawyer for Mr. Icahn and a partner at Dechert, said in an emailed statement that Mr. Icahn “has never done anything improper with respect to Clorox, Apple or any other stock.”
That, of course, doesn’t mean Icahn has never done anything improper ever, nor that he won’t be called to testify about anything, at least as far as some Senate Democrats are concerned.
"We write because we are increasingly concerned about the role you are playing in the Trump Administration and the possibility that you are breaking federal conflict of interest laws," the seven senators wrote in the letter, seen by Reuters….
The senators said Icahn had helped Trump pick the heads of the Treasury, Commerce, and the SEC, which have some oversight over the companies in which he has a stake.
"Your ownership of each of these companies – and others – raises alarming questions about how you, and the Trump Administration, are handling your many conflicts of interest," the senators wrote.
Investor Carl Icahn Dragged Into Gambler’s Insider Trading Trial [NYT]
Feds want to use Icahn’s tweets in insider trading case against sports gambler [N.Y. Post]
Senators Are ‘Increasingly Concerned’ Carl Icahn Is Profiting off Trump Adviser Role [Fortune]