Golf superstar Phil Mickelson forfeited $1 million after agreeing to repay the benefits from an alleged inside trading scheme to the U.S. Securities and Exchange Commission.
U.S. Attorney for the Southern District of New York and prosecutor for poker’s “Black Friday”, Preet Bharara announced back in May of 2011 that Mickelson had appeared to be a beneficiary for inside trading. However, the famous athlete has not been charged for any crimes involving the case.
According to reports, Bharara has alleged that Billy Walters, who is Mickelson’s friend passed a long an illegal tip in regards to the publicly traded Dean Foods to Mickelson. Walters is considered to be the most controversial gambler.
Walters received information about Dean Food from Thomas Davis, the company’s former chairman. Davis became in debt from gambling.
The controversial gambler bought around four million shares of Dean Foods in 2012, for $73.5 million. This made the company’s total daily trading volume go up 37 percent. He received knowledge from Davis that the company would have higher earnings guidance posted. In August of 2013, Walters sold his “investment” in the company for $110 million.
Davis has been cooperating with authorities and confessed to providing the confidential information to Walters.
Mickelson has been heavily known to add some extra stakes in his golf rounds during the PGA tour. During the events, he has been rumored to have made prop bets with certain competitors.
Golf Digest, has estimated that Mickelson has made $50 million in 2015. It is unclear just how serious and damaging Mickelson’s gambling is. Many people question why someone that is worth hundreds of millions would want to associate with Walters.
Mickelson is a very talented golfer. However, it is important to note that he has received four criminal indictments by state authorities and feds.
Even though Mickelson has not been charged, SEC strongly believes that Mickelson bought 240,000 shares of Deans Food soon after receiving the tip. They also believe that he made a $931,000 profit. The Wall Street Journal has reported that Mickelson owed Walters money from a bet.
Mickelson is considered by many to have one of the best short games in the business field. He has claimed to know a little bit about the food business, but has denied all of the reports about his inside trading. His attorney is claiming that he is innocent but has agreed to forfeit the $931K along with paying $105,291 in interest to the SEC though.
Walters and Mickelson are not the only high profile people that have been involved in a trading controversy recently. The CEO of Amaya, David Baazon, was recently charged for allegedly giving out private information about his funded company to investors that are outside. Currently he is on voluntary leave. Just like Mickelson, Baazon is denying that he participated in any illegal activities.
Only a certain type of people are attracted to gambling. In order for a person to be attracted to gambling they would have to be willing to take a lot of risk, even when their odds are very low at winning. This could be why when an inside tip becomes available for someone, ignoring the odds for this type of opportunity can be very tempting for people who are like this to resist. Not having a strong resistance to gambling is something that can affect people in all finance class statuses.
Many people jump to excitement each time they see any form of gambling in person. There is a very good chance that Mickelson is like this. This is something that can lead to a lot of danger. Not only can it lead to financial problems, but it can also cause you to be charged for committing illegal activities.
How can this effect Mickelson’s legacy as a golfer? This is a question that is on many people’s minds. As a golfer, he is definitely one of the best, if not the best ever to play the game. It would be different if this was the first indictment he has had in his career. Since this is not the first time being caught up in a gambling scandal, his legacy is probably at least somewhat damaged.
Even if he has a good PR person, the controversy that has occurred throughout his career might be hard for some to let go of. There are some who strongly believe that Mickelson should face jail time for his actions in the illegal insider trading scheme. A lot of people suggest that if he was NFL superstar Tom Brady, he would face some type of punishment for it, including jail time.
There should be a lesson learned from this. The lesson should be to never engage yourself in any illegal gambling activities.