Phil Mickelson paid Gambling Debt with $1m Insider Trading Profit

Phil Mickelson paid Gambling Debt with $1m Insider Trading Profit

The Securities and Exchange Commission (SEC) reports that Phil Mickelson made $1 million off insider trading, using this profit to pay off a large gambling debt.

The 45-year-old pro golfer lost big to famed Las Vegas gambler Billy Walters. But he was able to recoup the $1 million by getting hot stock tips on Dean Foods.

“These bets (stock investments) were no gamble at all — they were a sure thing,” said Manhattan US Attorney Preet Bharara.

Mickelson now has to pay back the $1 million he made from insider trading. But the good news for him is that he won’t face criminal charges for his actions.

According to the New York Post, Mickelson is a “relief defendant” in a civil case. A Supreme Court ruling, which states that people will only face criminal charges if they know the person giving insider tips, helped Mickelson avoid criminal prosecution.

“Phil has not been charged with insider trading,” his lawyers stated. “Phil was an innocent bystander to alleged wrongdoing by others that he was unaware of.”

This whole matter began when Thomas Davis, chairman of Dean Foods, gave stock tips to Walters from 2008-14. Of particular note was when Davis told Walters that Dean Foods would be selling their organic food and beverage line, Whitewave, in 2013.

“He had tomorrow’s headline today,” Bharara said regarding Walters and his stock tips.

Mickelson began trading Dean Foods in 2012 after racking up the gambling debt to Walters.

After receiving texts from Walters urging him to make trades, Mickelson put $2.4 million into the food company, netting a $931,000 profit. This gave him the money that he needed to pay back Walters.

Given everything that happened, Bharara is not happy about the Supreme Court ruling that helps Mickelson avoid criminal charges.

“There is conduct that we think is nefarious that undermines the markets … that we will not be able to prosecute because of the Newman decision,” said Bharara.

Walters, however, will face criminal charges because he knew Davis and received tips from him personally. The Dean Foods chairman would refer to the company as the “Dallas Cowboys” when discussing trades with Walters.

The latter was arrested on Wednesday while Davis has already pleaded guilty to the charges.

“Mr. Walters and his counsel look forward to his day in court where it will be shown that the prosecutors’ accusations are based on erroneous assumptions, speculative theories and false finger-pointing,” said Barry Berke, one of Walters’ lawyers.

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