UNITED STATES—The Securities and Exchange Commission has asked world renowned golfer Phil Mickelson to repay nearly $1 million that he allegedly made as a result of insider trading. According to a complaint filed Thursday, May 19 in federal court, and as reported by the Los Angeles Times, Mickelson is required to pay back those earnings, but will not be charged criminally.
Mickelson was named as a “relief defendant” in the U.S. District Court case involving Las Vegas investor and sports gambler Billy Walters and Thomas Davis, the former chairman of Dean Foods Co. Mickelson benefited from wrongdoing, but is not accused of any illegal act.
According to the complaint, Davis and Walters began conversing about private company profits and Davis began giving Walters inside tips in 2008. Information about the company’s – Dean Food Co. – upcoming quarterly earnings was used as an advantage to buy and sell company stock at valuable margins.
The LA Times reported that authorities said that the defendants would sometimes converse in code, referring to Dean Foods by the name “Dallas Cowboys.”
Mickelson, who had outstanding debts to Walters, received a phone call from Walters in late July 2012 pushing him to make a move in company stock.
According to a statement in the complaint, “Mickelson had placed bets with Walters both before and after July 2012 and owed Walters money at the time of the telephone call.”
Mickelson went on to purchase more than 200,000 shares of Dean Foods the following day using three different brokerage accounts totaling $2.4 million.
A week later, the stock’s value rose nearly 40 percent, and Mickelson was able to sell his shares for a profit approximating $931,000.
Walters and Davis have been charged with securities fraud, wire fraud, and conspiracy. Davis has also been charged with perjury and obstruction of justice.
The SEC, who filed the complaint, has asked Mickelson as well as other relief defendants in the case to “disgorge all ill-gotten gains received as a result of the conduct alleged in this Complaint.”
Mickelson’s attorney and former White House Counsel Gregory Craig released a statement on Mickelson’s behalf stating, “The complaint does not assert that Phil Mickelson violated the securities laws in any way. On that point, Phil feels vindicated. At the same time, however, Phil has no desire to benefit from any transaction that the SEC sees as questionable.”
Mickelson is one of the most popular golfers on the PGA tour. He has a lifetime earnings of $79.5 million, second only to Tiger Woods, according to CNN Money.