DF Dean Foods Company New

William "Billy" Walters, the legendary sports gambler, pleaded not guilty Wednesday to charges he participated in a long-running insider-trading scheme with the former chairman of Dean Foods Co.

Mr. Walters was arrested two weeks ago in Las Vegas and brought to Manhattan federal court, where prosecutors charged him with 10 criminal counts, including wire fraud and securities fraud. Officials say that over six years, Mr. Walters earned illegal profits and avoided losses of more than $40 million, thanks to lucrative tips from Thomas Davis, the former Dean Foods chairman.

Mr. Davis has already pleaded guilty and is cooperating against Mr. Walters, the government has said.

Barry Berke, a lawyer for Mr. Walters, didn't immediately respond to requests for comment. At the time of his arrest, Mr. Berke said, "It will be shown that the prosecutors' accusations are based on erroneous assumptions, speculative theories and false finger-pointing."

On Wednesday, a federal judge released Mr. Walters on a $25 million bond. Mr. Walters agreed to give up his use of medical marijuana pending trial, according to a spokeswoman for the Manhattan U.S. attorney's office.

The judge also allowed Mr. Walters to continue using his private plane, and his pilot had to sign onto the bond to promise not to take Mr. Walters anywhere internationally, the spokeswoman said.

Prosecutors allege Mr. Walters passed on a tip from Mr. Davis to golf star Phil Mickelson, who wasn't charged with wrongdoing but agreed to pay the Securities and Exchange Commission more than $1 million in trading profits and interest.

Federal and state authorities have indicted Mr. Walters four other times related to his gambling, but he has never been convicted.

Write to Nicole Hong at nicole.hong@wsj.com

(END) Dow Jones Newswires

June 01, 2016 16:15 ET (20:15 GMT)

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