October 7, 2019 / 2:00 PM / 13 days ago

U.S. Supreme Court rejects insider trading appeal by Las Vegas gambler

Professional sports gambler William "Billy" Walters departs Federal Court after a hearing in Manhattan, New York City, New York, U.S., July 29, 2016. Match interview USA-CRIME/ REUTERS/Andrew Kelly

WASHINGTON (Reuters) - The U.S. Supreme Court on Monday refused to hear Las Vegas sports gambler William “Billy” Walters’ appeal of his 2017 insider trading conviction that landed him a five-year prison sentence in a case that also drew attention because of his ties to billionaire investor Carl Icahn and golfer Phil Mickelson.

Walters had asked the justices to review a lower court’s rejection of Walters’ request to have the charges thrown out because an FBI agent leaked grand jury details about the investigation to reporters.

Walters, 73, was accused of using nonpublic information from former Dean Foods Co Chairman Thomas Davis about the dairy processing company and Olive Garden parent Darden Restaurants Inc to make more than $43 million in profits and avoiding losses from 2008 to 2014.

In addition to his prison sentence, Walters was given a $10 million fine and ordered to forfeit about $25 million.

Walters had built an estimated $200 million fortune as one of the most successful U.S. sports betters.

Neither Icahn nor Mickelson was charged with wrongdoing. Mickelson, who once had gambling debts to Walters, agreed in 2016 to forfeit $1.03 million he made on Dean Foods shares to settle a U.S. Securities and Exchange Commission civil case.

Walters tried to have his indictment thrown out, saying the case was prejudiced by leaks that prosecutors conceded likely violated criminal procedural rules. Walters suggested the leaks caused Davis to cooperate with the authorities and amounted to prosecutorial misconduct.

A Manhattan federal judge rejected his request, concluding that there was no basis to believe the leaks had any impact on the grand jury. The New York-based 2nd U.S. Circuit Court of Appeals agreed, ruling that Walters’ argument that he had been prejudiced was “sheer speculation.”

In his appeal to the Supreme Court, Walters said that a pattern of leaking by the FBI has demonstrated “systematic and pervasive” misconduct that warrants dismissal of the charges, regardless of whether any specific prejudice occurred.

Reporting by Andrew Chung; Additional reporting by Jonathan Stempel in New York; Editing by Will Dunham

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