Golfer Phil Michelson was charged with profiting from insider trading by the Securities and Exchange Commission on Thursday, but he faces only civil, not criminal, charges.
Two other individuals allegedly involved in the insider trading case with Michelson are Las Vegas investor and gambler Billy Walters and Thomas Davis, the former chairman of Dean Foods. Walters and Davis were named in federal criminal indictments unsealed Thursday.
The charge against Mickelson involves a July 2012 conversation he had with Walters. According to the SEC, Mickelson and Walters were friends and that the golfer owed the gambler for bets.
Walters had insider information from Davis about an upcoming spin-off Dean Food was planning and Walters advised Mickelson to buy its stock, according to the complaint.
Mickelson allegedly bought $2.4 million worth of the stock the next day, dwarfing he previous stock holdings of $250,000. When the stock rose in price, Mickelson was able to sell it at a $931,000 profit and pay off his bets with the proceeds of the trade, according to the SEC. The agency is seeking to collect at least the $931,000 profit from Mickelson.
Federal courts have recently reigned in prosecutors in insider trading cases. The government must now prove that those who receive tips knew that they were receiving nonpublic information.
Gregory Craig, a former White House counsel who represented Mickelson in the past, did not immediately respond to a request for comment Thursday.
The U.S. attorney’s office in Manhattan, which brought the criminal case against Walters and Davis, has scheduled a press conference at noon ET.