Phil Mickelson's gambling buddy convicted of insider trading

Phil Mickelson is even par, four strokes back at the Masters. (AP)
Phil Mickelson is even par, four strokes back at the Masters. (AP)

AUGUSTA, Ga. — At 1:52 p.m. ET Friday, Phil Mickelson began his second round at the Masters. Nine minutes later, in a Manhattan courtroom, his old gambling buddy, Billy Walters, was convicted of insider trading.

Walters was found guilty of cashing in on trading tips from a man named Tom Davis, the former chairman of Dean Foods, who testified that he fed Walters information that netted the notorious gambler $43 million over six years.

Mickelson, too, benefitted from these tips, according to the SEC. Acting on information relayed to him by Walters, Mickelson invested $2.4 million in Dean Foods on July 30 and 31, 2012. Shortly thereafter Dean Foods announced a spinoff unit that caused its stock price to surge. On Aug. 8, Mickelson sold his shares for a profit of $931,000.

But while Walters was indicted for the crime and now faces jail time, Mickelson escaped with a slap on the wrist. He was named a “relief defendant” in a civil suit last May, which meant he had to give the profit back, plus interest.

“Simply put, Mickelson made money that wasn’t his to make,” Andrew Ceresney, the SEC’s director of enforcement, said last summer.

So Mickelson cut the SEC a check for $1.05 million.

“I’m just glad that it finally is out and over with and behind me,” Mickelson said a few weeks later at the U.S. Open. “I’ve got to be more careful in my associations going forward.”

To be sure, if Walters were merely an associate, Mickelson wouldn’t have been ordered to pay back more than $1 million.

According to Walters’ attorney, Mickelson wasn’t called as a witness because he made it clear he would invoke his Fifth Amendment right against self-incrimination.

When asked after his round Friday if he had a comment on Walters’ conviction, Mickelson cut off the question, saying, “I’m gonna pass on that.”

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