May
30
2014
FBI and SEC pursue insider trading probe of Phil Mickelson, among others (*Updated)
By WUP Staff under General

Phil Mickelson is being investigated, along with investor Carl Icahn and Las Vegas bettor William “Billy” Walters, for insider trading by the federal authorities, according to a report from the Wall Street Journal:

The Federal Bureau of Investigation and the Securities and Exchange Commission are examining whether Mr. Mickelson and Mr. Walters traded illicitly on nonpublic information from Mr. Icahn about his investments in public companies, people briefed on the probe said.

Investigators are examining whether over the past three years Mr. Icahn tipped Mr. Walters—famous in Las Vegas for his sports-betting acumen—about potentially market-moving investments by Mr. Icahn’s company.

The FBI and SEC are examining whether Mr. Walters on at least one occasion passed a tip on to Mr. Mickelson, these people said, and are studying the two men’s trading patterns.

In other words, the authorities are looking into whether Mickelson and Walters may have illegally traded on private information offered by Icahn about his investments in public corporations. However, the trio has not been accused of any wrongdoing (yet, at least).

Phil’s attorney denied the allegations, but the golfer was approached by two FBI agents following his round at the Memorial on Thursday.

“Phil is not the target of any investigation. Period,” said a lawyer for Mr. Mickelson, Glenn Cohen, on Friday, adding that an FBI agent had told him Mr. Mickelson wasn’t a target. The FBI declined to comment on Mr. Cohen’s statement.

Two FBI agents approached Mr. Mickelson on Thursday after he finished a round of golf at the Memorial Tournament in Dublin, Ohio, seeking to speak with him in connection with the investigation, a person familiar with the situation said. Mr. Mickelson referred them to his attorney, this person said.

What’s the connection between the three individuals? The WSJ explains it in detail, but in short, Walters and Icahn are friends via a mutual acquaintance, and Mickelson and Walters are golfing buddies, according to people familiar with their relationship.

Sometimes Mr. Walters has suggested stocks for Mr. Mickelson to consider buying, one of the people said.

Meanwhile, Icahn claimed he didn’t know who Phil Mickelson, a three-time Masters champions and one of the most popular figures in the game, was.

The investigation into the trio revolves around suspicious trades in Clorox Co options days prior to Icahn announcing a bid to acquire the company in 2011 (which was later turned down). Then, the authorities widened their probe to examine the trading patterns by Walters and Mickelson relating to Dean Foods Co. The FBI agents who approached Phil on Thursday showed interest in his trading with the aforementioned company, according to the WSJ’s source.

Wow. Now, everyone is innocent until proven guilty, of course. However, let’s just say, Mickelson is well known for his penchant for gambling on and off the golf course.

*Update 1: The New York Times also files a separate report that the feds are investigating Mickelson, Icahn and Walters. I recommend reading as it breaks down the probe into the trio rather well.

**Update 2: Statement released by Team Mickelson on Saturday morning…

“I have done absolutely nothing wrong. I have cooperated with the government in this investigation and will continue to do so. I wish I could fully discuss this matter, but under the current circumstances it’s just not possible.”