Golfer Phil Mickelson was named in an insider trading complaint made on May 19 by the Securities And Exchange Commission (SEC).
The complaint was filed against two other individuals, a gambler named William Walters and former Dean Foods director Thomas Davis, who was with the company from 2008 to 2012.
The SEC says Walters received tips from his “long-time friend” Davis, who also gave him highly-confidential business information regarding Dean Foods, including sneak previews of at least six of the company’s quarterly earnings announcements. The complaint also says Davis provided Walters with an advance notice of the spin-off of Dean Foods’s profitable subsidiary, The WhiteWave Foods Company.
The SEC claims that Davis provided Walters with inside information that the former director obtained from investors—who had confidentially shared their plans to buy Darden Restaurant Inc. stock in 2013, aiming to push the company to make corporate changes.
With the help of inside tips, Walters traded Dean Foods and Darden securities, collecting illicit trading profits and saving a total of $40 million in loss, said the complaint.
The SEC says Walters helped Davis with his financial problems in exchange for the insider information.
Tiger Woods (L) and Phil Mickelson laugh during the first round of the 96th PGA Championship at Valhalla Golf Club on August 7, 2014, in Louisville, Ky. (Sam Greenwood /Getty Images)The complaint says Walters called the professional golfer in 2012. Mickelson allegedly placed bets with Walter before and after July 2012 and owed Walters money. When Walters called Mickelson and urged him to trade Dean Foods stock, the golfer did so—the next day in three brokerage accounts he controlled, the SEC said.
A week later, stock of Dean Foods increased to 40 percent after the announcements of the WhiteWave spin-off and reported strong second quarter 2012 earnings. Mickelson made $931,000 from the insider tips.
The complaint described Mickelson, 45, as a relief defendant, which means he is not accused of participating in insider trading.
Mickelson, who resides in Rancho Santa Fe, Calif., has had previous gambling and debt problems.
He was inducted into the World Golf Hall of Fame in 2011.
Update:
Mickelson’s management group said in a statement the golfer felt “vindicated” because the SEC did not charge him with violating securities laws.
“At the same time, however, Phil has no desire to benefit from any transaction that the SEC sees as questionable,” it said, according to the Associated Press.
“Accordingly, he has entered into an agreement with the SEC under which he will return all the money he made on that 2012 investment,” added the statement.
