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Phil Mickelson's insider trading scandal raises troubling questions

AP
May 20, 2016 at 5:47a ET
Phil Mickelson never saw a shot he didn't think he could hit.

Part of his massive popularity in golf is the high-risk nature with which he attacks the game. When he won his third Masters in 2010, the signature shot was a 6-iron between a gap in the Georgia pines that barely cleared a tiny tributary of Rae's creek and settled 5 feet from the hole.

It's the high risk off the golf course that could pose problems.



Mickelson's association with Las Vegas gambler Billy Walters brought him the wrong kind of attention Thursday.

Federal authorities named Mickelson as a relief defendant in a civil suit that accuses Walters and Thomas Davis, a former corporate board member at Dean Foods, of insider trading that allowed them to make tens of millions of dollars in illicit stock trades.

Mickelson was not charged. The Securities and Exchange Commission alleges he only benefited from the misdeeds of others. He agreed to repay (with interest) the $931,000 he made in a single trade of Dean Foods in the summer of 2012.

''Simply put, Mickelson made money that wasn't his to make,'' said Andrew Ceresney, the SEC's head of the enforcement division.

''Phil was an innocent bystander to alleged wrongdoing by others that he was unaware of,'' said Gregory Craig, one of Mickelson's lawyers.

Here's a timeline from 2012 contained in the complaint:

● Walters called Mickelson on July 27 and they exchanged texts over the next two days.

● Mickelson bought $2.4 million of Dean Foods shares on July 30 and July 31 in three brokerage accounts. The SEC says he had less than $250,000 in those accounts, had not been a frequent trader and had never bought Dean Foods stock.

● Dean Foods announced second-quarter earnings and the spinoff of subsidiary White Wave Foods after the market closed Aug. 7.

● The stock price went up 40 percent the next day, and Mickelson sold all the shares he had bought for a $931,000 profit.

Perhaps more troublesome is the SEC allegation that Mickelson had placed bets with Walters prior to the tip, he owed Walters money at the time of the trading and that he repaid Walters a month later ''in part with the proceeds of his trading.''

That raises some uncomfortable questions.

How much did Mickelson owe Walters? If he placed bets with Walter, what were they for?

The complaint has the attention of the PGA Tour, which has a section in its player handbook under ''Conduct of Players'' related to gambling. One part says that a player shall not ''associate with or have dealings with persons whose activities, including gambling, might reflect adversely upon the integrity of the game of golf.''

''That's something we're in the process of looking at and determining,'' tour spokesman Ty Votaw said.

Two years ago at the Memorial, two FBI agents approached Mickelson after his first round to talk to him about Walters during an insider trading investigation. Mickelson said that week he had been cooperating, that he had done nothing wrong and that he hoped in the future he would be able to discuss it.

He wasn't talking Thursday.

Instead, his management company released a statement that said Mickelson felt ''vindicated'' because the SEC complaint does not say he violated any securities laws. It also said Mickelson did not want to benefit from a transaction the SEC viewed as questionable, so he was returning the money.

And it referenced the standards of his corporate partners who pay him millions in endorsements.

''He subscribes to the same values and regrets any appearance that, on this occasion, he fell short,'' it said. ''He takes full responsibility for the decisions and associations that led him to becoming part of this investigation.''

According to Golf Digest, Mickelson earned approximately $52 million on and off the golf course last year.

The statement said Mickelson appreciates that his sponsors are staying with him.

ExxonMobil and Barclays declined comment. KPMG said while disappointed by the SEC announcement, Mickelson's statement ''makes clear he respects and shares'' the company's values.

What next?

Mickelson often is referred to as the ''People's Choice'' for his relationship with the fans. He treats them well. He takes time for them. His philanthropy is off the charts, whether it's a teacher's academy with ExxonMobile, paying for school supplies for the underprivileged or providing college education for wounded and fallen soldiers.

That might be enough to get him through his latest bad lie, this one not anywhere near a golf course.

http://www.foxsports.com/golf/story/phil...uestions-052016

Being from that side of the "pond", he can turn this in to a living even if he never wins again.

He is the first Swedish male to win a major. Annika Sorenstam won a whole bunch of them. A little piece of trivia I heard yesterday, Mickelson would have won (141) or tied (1) 142 of the 145 British opens ever played.

If you would have told me Phil was going to shoot a 65 moments before his round were to begin, I would have bet $2K on him to win.

No Jesper never won a major. I think he placed 2nd a few times.

That is what makes golf so awesome. Anybody with some coordination and desire and study can become a 9 handicap golfer. Getting down to a 4 is doable.....I did it and held it for over a decade, even hit 3 for short periods of time.....but man...shaving off those last 3-4 strokes is the part most of us can't get. At that point it is in the muscle memory world along with training. Seriously, you are talking 3-4-5-6 strokes a round between a pretty decent weekend golfer and the best golfers in the world, but man, those few strokes are a world apart.

I agree with all of that.

When I was younger I played under a 2 for a while. I thought I was really good and by amateur standards, I was. One year I went to Disney World and played the Disney course the week after the Tour had played there. I played from the tips and played about as well as I have ever played and shot a 74. You know how after almost every round of golf, no matter how good you played, you walk off the course thinking, "If I could have just made that one putt" or "I should have got up and down on 7 for par"? Well I had almost none of that, I couldn't think of too many places I could have shaved a single shot... and as I walked off 18, it occurred to me, Payne Stewart had played that same course just a couple days before and shot 63. 60 freakin' 3. So not only did I have to figure out how to shave a shot or two, I had to figure out how to shave more than a shot on every other hole.

I think that folks who don't play golf or play to high handicaps don't really understand the wide chasm between being a really good amateur and doing what they tour guys do on a daily basis... getting to a 7 hdcp is very difficult, getting from a 7 down to a 3 or 4 is tremendously difficult.. and at a 4, you aren't even in the same ballpark yet as the guys who do this for a living...

Under 2 you were in the top 1% in the country as an amateur. You should have been in the local qualifying for the US Open.

That's a solid effort. What was the course set up like?

That was still Balata days too which only adds to the length. Long, wet and a constant down pour to deal with and you go 76 - 73? Like I said, a solid effort!