Professional golfer Phil Mickelson has been named in a U.S. Securities and Exchange Commission complaint related to insider trading released Thursday.
Mickelson, 45, of Rancho Santa Fe, California, allegedly made close to $1 million profit in August 2012, just days after federal officials say he received a stock tip from a co-defendant Mickelson owed money to from placing gambling bets.
Mickelson "has entered into an agreement with the SEC under which he will return all the money he made on that 2012 investment," according to his attorney.
The SEC complaint names sports gambler William “Billy” Walters and Thomas C. Davis, a director of Dean Foods. Federal officials allege that Davis would tip Walters about potential profit-making investments in his company.
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As a relief defendant, Mickelson is not accused of participating in insider trading, only of receiving money as a result of the scheme.
The complaint alleges that Walters called and texted Mickelson several times on July 27 and 28, 2012, several days before Mickelson purchased $2.4 million worth of Dean Foods shares. Officials claim this was Mickelson’s first investment in the company.
Approximately one week later, on August 8, 2012, Dean Foods made several announcements that pushed its stock up 40 percent. Mickelson sold his shares of Dean Foods that day for a profit of $931,000.
Federal investigators claim Walters made more than $17.1 million in trading profits.
In May 2014, Mickelson confirmed that FBI agents investigating insider trading questioned him as he finished playing a round at the Memorial Tournament in Dublin, Ohio.
Mickelson wouldn't discuss details about his relationship with Walters, a multimillionaire who owns several golf courses and auto dealerships. He wouldn't talk about stock tips he received, but reiterated that he did nothing wrong.
"And that's why I've been fully cooperating with the FBI agents, and I'm happy to do in the future, too, until this gets resolved," he said two years ago.
A statement from Mickelson's attorney Thursday said the golfer feels vindicated after a six-year SEC investigation.
"The SEC has now completed its investigation into that investment and has concluded that Phil Mickelson did not engage in any wrongdoing," the statement reads. "The SEC has filed a civil complaint against certain individuals, including an acquaintance of Phil's, but that complaint does not assert that Phil Mickelson violated the securities laws in any way. On that point, Phil feels vindicated."
Davis, 67, lives in Dallas. He served on the board of directors of Dean Foods Company and was a member of the board’s audit committee. A graduate of Harvard Business School, he resigned from the company in August 2015.
According to the complaint, Davis had misappropriated $100,000 from a Dallas-based charity he managed that raised funds for a battered women and children’s shelter. Davis took the money to repay a gambling debt he owed to a Las Vegas casino, the complaint said.
A Dean Foods spokesman said the company is cooperating with the government investigation.
Mickelson, a World Golf Hall of Famer, has earned three Masters titles along with multiple PGA Championship and Open Championship awards.
Mickelson has long had a reputation for being a gambler, though he has said he scaled back his habit after his son, Evan, was born in 2003. The most publicized payoff was when Mickelson and friends won $560,000 on a preseason bet (28-1 odds) that the Baltimore Ravens would win the 2001 Super Bowl.
He has a history of playing money games during the practice rounds. He occasionally gets a group of players and caddies together for dinner and small wagering during the NBA and NHL playoffs, and prominent fights.
Here is more of Mickelson's statement:
"Phil understands and deeply respects the high professional and ethical standards that the companies he represents expect of their employees, associates and of Phil himself. He subscribes to the same values and regrets any appearance that, on this occasion, he fell short. He takes full responsibility for the decisions and associations that led him to becoming part of this investigation. As he moves forward, Phil remains committed to demonstrating that he fully shares the same values as the companies he represents. He very much appreciates that they have determined to continue their sponsorship agreements with him. He is pleased that this matter is over, and he will have no further comment."