Bloomberg now reports that Mickelson is being named a “relief defendant”– meaning that he is not being charged criminally, but that the SEC wishes to dislodge his ill-gotten gains.
Mickelson owed Walters money and the Las Vegas gambler called him in July 2012, urging the three-time Masters Champion to trade in Dean Foods stock, according to the SEC complaint. The following day, Mickelson traded in three brokerage accounts he controlled. About a week later, shares jumped 40 percent on announcements of strong quarterly earnings and that Dean Foods would spin off its WhiteWave subsidiary, earning Mickelson about $931,000.
The investigation made headlines in 2014 with news that the government was probing Davis, Walters and Mickelson ahead of billionaire investor Carl Icahn’s $10.2 billion offer in 2011 for Clorox Co. Neither Clorox nor Icahn were mentioned in the SEC or Justice Department documents Thursday. Icahn hasn’t been accused of wrongdoing.
Prosecutors referred in their complaint to someone else who owed a gambling debt to Walters. They spoke by phone and texted in July 2012 before the person bought 240,000 shares in Dean Foods, using three brokerage accounts. The person had never previously traded in the stock, prosecutors said. The timing and description of those trades broadly match the SEC material about Mickelson.
Given the noise around Clorox, it remains possible that Walters had given similar “tips” to others who owed him gambling debts. It is not clear why Davis gave Walters the information or how he may have benefited from doing so.
Disclosure: The author holds no position in any stock mentioned
Why does Phil Mickelson owe anyone money? I feel like he should be able to pay off his debts…