Corrupt Golf Media Trying to Protect Mickelson — but the financial media isn’t

Perhaps my favorite, from Forbes:

I’m sorry, but I’m not buying this Phil Mickelson insider tip on Dean Foods stock story. Not for damn second.

You mean to tell me that a guy who has made a half a billion bucks during his career, a golfer who pulls in over $50 million from endorsements annually, and who doesn’t normally play the stock market, was clueless when it came to making a big bet on Dean Foods for a friend who happened to be a famous sports bettor?

And:

Four years ago, Mickelson was going to be an owner in the San Diego Padres as part of the O’Malley group. He was gung-ho and plenty rich enough to make it happen. But it never happened. There was never a reason given, except he did’t want to pay taxes.

Around that time he sold a beach home, then he sold a ranch last year for less than half of what he had been asking for, and has complained publicly about his taxes.

This to me looks more like a guy with gambling issues than stock trading issues. And it’s the only reason I can come up with that  he did such an obviously dumb thing for Walters.

From Fortune:

Late in July 2012, Phil Mickelson, one of the world’s most famous golfers, received a phone call from a well-known professional sports gambler, William “Billy” Walters.

At the time, U.S. authorities say, Mickelson owed Walters a gambling debt, and Walters had a hot stock tip: buy shares in the food company Dean Foods DF 0.84% .

Four days later, Mickelson owned $2.4 million worth of Dean Foods shares, according to the U.S. Securities and Exchange Commission. A few weeks after that, he reaped a $931,000 profit when the company announced a spinoff that sent its share price soaring. Mickelson then paid off his debt to Walters.

From Bloomberg:

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.

And:

SEC cases involving relief defendants aren’t uncommon, particularly in insider-trading matters, legal experts said. The category often includes family members or others whose accounts are used without their knowledge by criminals.

But Mickelson personally engaged in stock trading and made a profit, the SEC said, based on a tip he received. That’s different from an unknowing wife or child whose accounts are used to stash illicit profits, said Stephen Crimmins, a former SEC enforcement attorney who is now a partner at the law firm Murphy & McGonigle.

For Mickelson, it’s an outcome that allows him to avoid a taint that could endanger rich sponsorships with companies including KPMG LLP and Callaway Golf Co., which both said Thursday they would continue their relationships with him.

For the SEC, it’s an approach that may open the door to future complications in other cases. Defense attorneys may seek the “Mickelson treatment” for clients who said they don’t know where stock tips came from or if anyone got a substantial benefit for giving them, some lawyers said. Other defense counsel could balk at having clients return money in the absence of allegations of wrongdoing.

In using the relief defendant status, “the SEC is seeking trading profits without having to prove the trader did anything illegal,’’ said Thomas Zaccaro, a former SEC enforcement attorney who is now at Zaccaro Morgan LLP in Los Angeles. “It’s certainly unusual.”

Fox Sports wasn’t afraid to weigh in:

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?

Yeah, what were they for?  If Billy Walters was not above inside trading, he would not be above taking Mickelson bets on golf.  And what kind of influence did he have over Mickelson when Mickelson was in debt to him.  The Mickelson Ryder Cup teams with Mickelson on them are 2-5.  Just sayin’.

And:

he 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.

Will you look at this matter, or will you ignore it as with Dr. Galea and Biogenesis?  Because, you know, there’s nothing to look at.  Mickelson should automatically be suspended.  The U.S. government says Mickelson owed this gambler more than $931,000.  Let’s see… the PGA Tour prohibits association with  “persons whose activities, including gambling, might reflect adversely…”  well, gee, there’s not a log of wiggle room here.  I mean, there is none.

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3 Responses to Corrupt Golf Media Trying to Protect Mickelson — but the financial media isn’t

  1. Ken says:

    As he doesn’t normally play the market, I’d be more inclined to believe that he bought the Dean stock unknowingly using an insider tip rather than if he had been a regular stock trader.

    Interesting article. Not a lot of depth, but does make a strong suggestion of a serious gambling problem.

    • lannyh says:

      What makes you think unknowingly? Phil and Walters have been buddy-buddy for a long time. I think best case scenario is that Walters tells Mickelson to do it, and Mickelson questions him, and Walters says, “Just do it and stop asking questions. You don’t want to know.” I mean come on, if your bookie/buddy, to whom you owe a ton of money, insists you to buy a position in Hershey, you aren’t going to wonder why? Best case for Mickelson is that he suspected something, but tried to maintain deniability. I think Mickelson likely flipped and helped nail Walters, who will be going away for a long time.

      • Ken says:

        I don’t think it was unknowing. I just said that because the article pointed out that Mickelson doesn’t normally play the market. So I was thinking, okay, maybe he’s a novice, took the tip and ran with it. They seemed to interpret it the other way, that being a novice he’d be more careful.

        I don’t believe it. I’m just saying I’d be more likely to believe that behavior of a non-trader than an active one.

        I agree with you. He flipped.

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