SEC claims golfer Phil Mickelson made almost $1M through insider trading
WASHINGTON, D.C. — Golfer Phil Mickelson agreed Thursday to pay back the nearly $1 million a Securities and Exchange Commission complaint accused him of gaining from a 2012 insider trading tip.
Mickelson, Las Vegas investor and gambler Billy Walters and former chairman of Dean Foods Thomas Davis, were named in a federal criminal indictment Thursday, but Mickelson will not face criminal charges.
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Mickelson was named as a "relief defendant" in the case, meaning he benefited from wrongdoing but is not accused of any illegal act, according to CNN. The SEC document stated Mickelson and two other relief defendants had "been unjustly enriched and must disgorge the amount of their ill-gotten gains."
The SEC claims Davis gave Walters inside information in 2012 about a spin-off Dean Foods was planning. Walters allegedly urged Mickelson to buy stock in Dean Foods, and the next day Mickelson bought $2.4 million worth of stock.
After the stock rose 40 percent the following week, Walters, to whom Mickelson owed money, urged him to sell the stock which earned about $931,000 in profit, according to the SEC complaint.
In September of that year, Mickelson repaid Walters using some of the proceeds from the sale.
From 2008 to 2012, Waters received, "highly-confidential information" about the business from former Dean Foods director Thomas Davis, who also owed him a lot of money. It included "sneak previews of at least six of the company’s quarterly earnings announcements and advance notice of the spin-off of Dean Foods’ profitably subsidiary "The WhiteWave Foods Company," according to the complaint.
They used prepaid cell phones and the "Dallas Cowboys" as a code for Dean Foods, the SEC claimed.
Although Mickelson was not accused of violating SEC laws himself, "Phil feels vindicated and has no desire to benefit from any transaction that the SEC sees as questionable, his attorney, former White House counsel Gregory Craig said in a statement.
Mickelson agreed to give back the $931,000 he is suspected of profiting from the trade.
The government must now prove that the persons involved knew they were receiving information that was not made public.
Phil Mickelson was born in San Diego and attended Arizona State University where—in 1991 at age 20—he won the PGA Tour’s Northern Telecom Open. He went professional a year later at the U.S. Open.