“Davis breached his duty and broke the law as the result of being in dire financial straits,” Andrew J. Ceresney, the head of the S.E.C.’s enforcement division, said at a news conference on Thursday. And Mr. Walters, who was arrested at a resort in Las Vegas late Wednesday, was “gambling on a sure thing.”

The case, however, is much broader than a story about gambling debts. The charges represent one of the most notable insider trading prosecutions since a federal appellate court overturned two prominent convictions — a ruling that led to the dismissal of about a dozen other convictions.

After the United States Court of Appeals for the Second Circuit overturned the convictions of two hedge fund managers, Todd Newman and Anthony Chiasson, in December 2014 — and in the process imposed the greatest limits on prosecutors in a generation — the government predicted a chilling effect on future insider trading investigations. Preet Bharara, the United States attorney in Manhattan, who led a sweeping crackdown on insider trading, warned that the ruling could allow “a potential bonanza for friends and family of rich people.”

But in charging both Mr. Walters and Mr. Davis with securities fraud and wire fraud, his office and the S.E.C. are sending a message that these cases can still be made.

“Brazen insider trading continues to be a blot in our securities markets, and so the integrity of our markets continues to be a priority for this office,” Mr. Bharara said at the news conference. Still, he added that “there is conduct that we think is nefarious and undermines faith in the market and undermines the strength of the market that will not be able to be prosecuted because of the Newman decision.”

Mr. Walters’s lawyer said his client had done nothing wrong. “Bill Walters is a true American success story, whose extraordinary accomplishments as a lawful sports gambler have been widely recognized and lauded,” the lawyer, Barry Berke, said in a statement. “Mr. Walters and his counsel look forward to his day in court.”