Phil Mickelson’s insider trading case indicative of a problem (or two)
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By DERON SNYDER
According to the PGA Tour, Phil Mickelson has earned $79.5 million in his career as a professional golfer. According to Forbes, “Lefty” earns more than $40 million from endorsements.
Suffice it to say Mickelson shouldn’t be desperate for money.
That’s why revelations about his insider trading are so confusing.
The Securities and Exchange Commission says Mickelson received a tip from legendary sports gambler Bill Walters, to whom Mickelson owed money. When the ill-gotten information paid off one week later, to the tune of $931,000, the proceeds were used to help relieve his debt to Walters.
Here’s the part that gets me: Authorities say he purchased $2.4 million worth of stock in Dean Foods after being urged by Walters – who was privy to info from a Dean Foods executive, another indebted gambler.
Why would Mickelson need help paying his gambling bill? Why wouldn’t he simply use the $2.4 million to pay Walters? How much did he owe and what kind of betting is he doing?
Whatever the answers, they cast Mickelson in a bad light, puncturing his good-guy reputation with yet another round of dubious activities. He was a defendant in the SEC case and escaped criminal charges due to a loophole, but has to repay the $931,000 plus $105,000 in interest.
“The complaint does not assert that Phil Mickelson violated the securities laws in any way” said a statement from his legal advisor Gregory Craig. “On that point, Phil feels vindicated. Phil was an innocent bystander to alleged wrongdoing by others that he was unaware of.”
Craig needs to improve his lie.
Authorities said Mickelson had a mere $250,000 in the stock market. There’s no way he put almost 10 times that amount on one company without knowing something. When Dean Foods announced a spinoff a week later, causing a 40 percent jump in its price, Mickelson cashed out the next day.
“Simply put, Mickelson made money that wasn’t his to make,” said Andrew Ceresney, director of the SEC’s enforcement division.
Maybe Mickelson would face more criticism if was caught cheating on his wife and his secret voicemails were released to the public. But cheating in the stock market? Not too much of a problem. Two of his biggest sponsors are backing their guy.
“We have had a long-standing partnership with Phil and value our relationship with him,” Calloway said in a statement.
KPMG had similar sentiments: “While we are disappointed by what the SEC announced, we appreciate that Phil’s statement makes clear he respects and shares the values of KPMG. We accept his statement of personal responsibility and commitment and have nothing further to add.”
Mickelson has won a lot of support for his goofy smile and Everyman persona. But a closer look reveals someone with questionable character at best, and outright criminal tendencies at worst.
Based on court documents and two sources, ESPN’s “Outside the Lines” reported in March that Lefty was part of “an illegal gambling operation which accepted and placed money on sporting events.” He reportedly was the unnamed “gambling client” who had approximately $2.75 million laundered by a sports handicapper who pleaded guilty.
Apparently, Mickelson isn’t just poor at managing his money (otherwise he’d be able to satisfy his debts with a wad of cash from under his sofa cushion). He also seems to have a gambling habit that should worry his sponsors and the PGA Tour.
He’s notorious for side wagers and money matches, which aren’t uncommon among pro golfers but take on legendary status with Mickelson. He once was reprimanded by the Tour after winning $500 from Mike Weir in the players’ lounge at the NEC Invitational, wagering $20 at 25-1 odds that Jim Furyk would hole a bunker shot.
Mickelson has won big-money, publicized bets on the Super Bowl (Baltimore Ravens in 2001) and the World Series (Arizona Diamondbacks in 2001). There’s no indication he has ever bet on golf, but the idea of Lefty cavorting with pro gamblers and owing them money can’t make officials happy.
According to the tour handbook’s “Conduct of Players” section, players shall not “associate with or have dealings with persons whose activities, including gambling, might reflect adversely on the integrity of the game of golf.”
Between the money laundering case and the Dean Foods case, Mickelson could have a hard time arguing that he hasn’t violated the policy. “That’s something we’re in the process of looking at and determining,” tour spokesman Ty Votaw told the Associated Press.
Circumstances suggest that a suspension is in order. But that could be the least of Mickelson’s worries.
If I were a betting man, I’d say getting his financial house in order and curbing his appetite for gambling are bigger concerns.
