Golfer Phil Mickelson profited from Dean Foods insider trades, SEC says

Mickelson named as ‘relief defendant’ by agency

Golfer Phil Mickelson on Thursday was accused of insider trading in connection with a case where two others are facing criminal charges.

Mickelson said by the Securities and Exchange Commission to have used an alleged tip he received from gambler William “Billy” Walters, who got information from a former Dean Foods DF, +0.73%  chairman, Thomas Davis.

The SEC said that Walters called and then sent text messages to Mickelson, who ultimately bought a $2.4 million position in three accounts he controlled. Those securities “dwarfed” Mickelson’s other holdings, which were collectively valued at less than $250,000, the SEC said. Mickelson had not been a frequent trader, and these were his first Dean Foods purchases, the SEC said. Mickelson made a profit of approximately $931,000 from the stock, which he held for about a week.

The SEC referred to Mickelson as a so-called relief defendant. A relief defendant is someone who has received property obtained illegally but is not directly accused of wrongdoing.

The reason Mickelson, who the PGA Tour website indicated has career earnings of $79.5 million, made these trades? According to the SEC, Mickelson owed Walters money at the time Walters urged him to trade. That’s also the case with Davis — the SEC said he owed Walters money.

The Justice Department has alleged that Davis provided material nonpublic information to Walters, who is also charged in a separate indictment, about Dean Foods earnings results, its outlook and the spinoff of Whitewave-Alpro, a Dean subsidiary.