The SEC is now looking to recoup any profits Mickelson gained from the trade, but he was not criminally charged.
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But at the same time the case as it is in the civil court, the SEC wants to frame it by establishing the fact that the golfer has made illicit trading profits.
From 2008 through 2012, the SEC said, Davis passed Walters highly confidential information on Dean Foods, including sneak previews of at least six of the company’s quarterly earnings announcements and advance notice of the spin-off of its profitable subsidiary, WhiteWave Foods Co.
A relief defendant is someone who has received property obtained illegally but is not directly accused of wrongdoing.
Walters, who is also a well-known philanthropist businessman, was arrested Wednesday at a Las Vegas resort.
The charges marked the most significant insider trading case that Bharara’s office has pursued since a 2014 appellate ruling limited the scope of the applicable laws, a major setback for a high-profile crackdown that began in 2009.
Phil Mickelson will have to pay the SEC 1,000 for the insider trading he did in 2012.
Walters was freed from federal custody on Thursday after his lawyer, Richard Wright, presented a $100,000 cashier’s check in court to secure a $1 million bond ahead of a June 1 arraignment date in U.S. District Court in NY.
The three-time Masters victor wasn’t charged with any wrongdoing. “On that point, Phil feels vindicated”, said the statement released by his attorney, former White House counsel Gregory Craig. Mickelson’s attorney said in a statement that “he has no desire to benefit from any transaction that the SEC sees as questionable” and will return all the money made on the investment the SEC cited in its complaint. [He] was an innocent bystander to alleged wrongdoing by others that he was unaware of. The Rancho Santa Fe-based golf pro traded the stock at Walters’ insistence after the stocks rose 40 percent a week later and made about $931,000, according to the SEC.
Walters also phoned Mickelson in 2012 and urged him to trade in Dean Foods stock, the SEC complaint alleged.
Prosecutors and regulators announcing those charges were barraged with questions about their decision-making regarding Mickelson, including how authorities could claw back money from him if they didn’t say he’d done anything wrong. Walters rescued Davis from dire financial straits again in November 2011, this time providing Davis with $350,000, and again a couple months later in January 2012, when Walters took over the $625,000 loan he had earlier arranged for his friend to provide Davis.
The SEC said Mickelson, 45, owed Walters money after placing bets with him.
The story will likely end here (unless somebody starts digging deeper into that original money Mickelson owed Walters for “bets”). The case established that when someone gives out inside information (let’s call them a “tipper”) to a recipient (the “tippee”), the government needs to prove not only that the tipper gave the information in a breach of fiduciary duty, but gave it for personal benefit-and that the tippee knew both of those things.
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Several of those sponsors, including golf club maker Callaway and pharmaceutical firm Amgen, did not immediately respond to Reuters’ requests for comment.
