Michael Avenatti — an attorney known for representing Stormy Daniels in her claim that President Donald Trump paid her $130,000 to keep quiet about an affair — is going on the offensive after federal prosecutors charged him with conspiring to extort Nike Inc. (NKE).

Prosecutors say that Avenatti threatened to publicize a claim that Nike made illegal payments to high school basketball players unless the company met his demands, including payments to Avenatti and a co-conspirator, and to one of Avenatti's clients. If Avenatti argues his communications with Nike amounted to negotiations on behalf of that client, he could face an uphill battle, according to criminal defense attorney Jeffrey Gold.

“Arguments can be made by reasonable legal minds that this is in that gray area where he was acting for a client, but I don't see it,” Gold said. “And because Avenatti is a lawyer, you have an elevated responsibility, and that counts against him — it makes it worse if you're in a position of trust.”

‘Nike will not be extorted’

Law enforcement officers arrested Avenatti Monday in Manhattan in coordination with prosecutors in California, where Avenatti is facing separate wire fraud and bank fraud charges. He was released from custody after posting bail.

According to the New York complaint, Avenatti demanded that Nike pay him a $12 million retainer, plus guarantee total payments of $15 million to $25 million for himself and a co-conspirator to conduct an unsolicited investigation of the so-called illegal payments. Avenatti also allegedly demanded $1.5 million for his client, who he said was the coach of a youth basketball team who knew about the claimed payments. The Wall Street Journal reports that celebrity attorney Mark Geragos, who has not been charged in the matter, is the co-conspirator named in the government’s complaint.

“I’ll go and I’ll go take ten billion dollars off your client’s market cap,” Avenatti told Nike attorneys, in one of multiple recorded conversations, according to the District Court’s complaint.

Nike’s stock dropped nearly $2 Monday in the hours after Avenatti posted a tweet saying he planned to hold a Tuesday press conference to announce an alleged scandal perpetrated by Nike. The stock rebounded before market close.

In a statement to Yahoo Finance on Monday, Nike said, “Nike will not be extorted or hide information that is relevant to a government investigation. Nike has been cooperating with the government’s investigation into NCAA basketball for over a year.”

On Tuesday Avenatti continued to attack the company from his Twitter account.