On Thursday, Federal authorities filed charges against William “Billy” Walters and Thomas Driver in an alleged insider trading scheme spanning at least seven years and, also allegedly, involved golfer Philip Mickelson.
Walters, a known sports-bettor, is believed to have made approximately $32 million and avoid $11 million in losses through his relationship with former Dean Foods board member, Thomas Davis. This is according to the indictments as filed with the US District Court of Manhattan.
Mickelson, of course, has been among the most popular professional golfers within the last 25 years. Known for his distinctive southpaw swing—earning him the nickname “Lefty”–he won his first PGA Tour event in 1991 as an amateur and went on to win a total of 51 professional tournaments globally, which includes five major golf championships.
The Securities and Exchange Commission indictments also appear to indicate that Walters, 69, also used this insider information to assist Mickelson, who he instructed to buy shares of Dean Foods just before they announced plans to spin-off one of its many subsidiaries. Sure enough, Mickelson bought a handful of shares—the next day—and within the next week, Dean Foods shares improved by 40 percent. This, of course, generated a nice profit for Mickelson, who netted somewhere around $931,000.
According to the complaint: “Mickelson had placed bets with Walters prior to the tip, and Mickelson owed Walters money at the time of the Dean Foods trading. Mickelson repaid Walters in September 2012, in part with the proceeds of his trading.”
Walters, of course, has denied wrongdoing but Mickelson, who has not been charged—or even accused—has agreed to give back the money.
Indeed, Mickelon’s legal team—Gregory B. Craig and Pat Swan—contend “Phil has not been charged with insider trading. [He] was an innocent bystander to alleged wrongdoing by others that he was unaware of. Phil is innocent of any wrongdoing. “
Still, SEC Enforcement Division Head, Andrew Ceresney remarks, “Simply put, Mickelson made money that wasn’t his to make,” and so he will repay $931,738.12 in trading profits as well as $105,291.69 in interest.
Craig also makes sure to note, however, “The complaint does not assert that Phil Mickelson violated the securities laws in any way,” and so Mickelson feels “vindicated.”
The attorney continues, “At the same time, however, Phil has no desire to benefit from any transactions that the SEC sees as questionable.”