Phil Mickelson was named a “relief defendant” in connection to a case in which two other men are facing criminal charges. As a relief defendant, Mickelson is “not accused of wrongdoing but has received ill-gotten gains as a result of others’ illegal acts.“
MarketWatch.com has the details:
Mickelson is said by the Securities and Exchange Commission to have used an alleged tip he received from gambler William “Billy” Walters, who got information from a former Dean Foods chairman, Thomas Davis.
The SEC said that Walters called and then sent text messages to Mickelson, who ultimately bought a $2.4 million position in three accounts he controlled. Those securities “dwarfed” Mickelson’s other holdings, which were collectively valued at less than $250,000, the SEC said. Mickelson had not been a frequent trader, and these were his first Dean Foods purchases, the SEC said. Mickelson made a profit of approximately $931,000 from the stock, which he held for about a week.
The SEC referred to Mickelson as a so-called relief defendant. A relief defendant is someone who has received property obtained illegally but is not directly accused of wrongdoing.
The reason Mickelson, who the PGA Tour website indicated has career earnings of $79.5 million, made these trades? According to the SEC, Mickelson owed Walters money at the time Walters urged him to trade. That’s also the case with Davis — the SEC said he owed Walters money.
According to the Huffington Post, Walters was arrested in Las Vegas on Tuesday and Davis pleaded guilty on Monday. Both Walters and Davis were charged with securities fraud, wire fraud and conspiracy. Davis was also charged with perjury and obstruction of justice.
As for Mickelson, his lawyer released a statement saying the five-time major champion would repay the government the money in question.
Statement from Mickelson attorney: Phil has entered into an agreement with SEC under which he will return all $ from trade in question.
— Will Gray (@WillGrayGC) May 19, 2016
[Market Watch, Huffington Post]
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