Pro golfer Phil Mickelson was named as a relief defendant Thursday in a case brought by the Securities and Exchange Commission related to insider trading charges against a professional sports gambler who allegedly made $40 million based on illegal stock tips on Dean Foods from a corporate insider who owed him money.
The SEC alleges that the sports gambler, William “Billy” Walters of Las Vegas, was owed money by then-Dean Foods Co. board member Thomas C. Davis.
According to the SEC complaint, Davis regularly shared inside information about Dean Foods with Walters in advance of market-moving events, using prepaid cell phones and other methods in an effort to avoid detection.
The SEC further alleges that while Walters made millions of dollars insider trading using the confidential information, he provided Davis with almost $1 million and other benefits to help Davis address his financial debts.
The SEC says that Mickelson traded Dean Foods’ securities at Walters’ urging and then used his almost $1 million of trading profits to help repay his own gambling debt to Walters.
While Walters and Davis are charged with insider trading, Mickelson is named as a relief defendant, and is not accused of wrongdoing or violating securities laws.
Mickelson neither admitted nor denied the allegations in the SEC’s complaint and agreed to pay full disgorgement of his trading profits totaling $931,738.12 plus interest of $105,291.69.