See greats like Phil Mickelson play Torrey Pines during the Farmers Insurance Open. Photo courtesy of PGA

Local professional golfer Phil Mickelson must repay almost $1 million but will not face criminal charges in connection with a Securities and Exchange Commission complaint that he used stock tips passed on from a sports gambler involved in insider trading.

Mickelson, 45, was allegedly urged by gambler William “Billy” Walters of Henderson, Nevada, to whom he owed money, to buy stock in Dallas-based Dean Foods Co. in July 2012. The Rancho Santa Fe-based golf pro traded the stock at Walters’ insistence after the stocks rose 40 percent a week later and made about $931,000, according to the SEC.

“On one occasion, at a time when Walters was in possession of material nonpublic information regarding Dean Foods, Walters communicated with Mickelson, with whom he was friends, and urged Mickelson to trade in Dean Foods stock,” the SEC complaint stated.

Mickelson repaid Walters in September 2012, partially using the proceeds of the sale.

From 2008 to 2012, Waters received “highly-confidential information” about the business from former Dean Foods director Thomas Davis, who also owed him money. It included “sneak previews of at least six of the company’s quarterly earnings announcements and advance notice of the spin-off of Dean Foods’s profitable subsidiary, The WhiteWave Foods Company,” according to the complaint.

They used prepaid cell phones and used the “Dallas Cowboys” as a code for Dean Foods, according to the SEC.

Mickelson was named a “relief defendant” in the case, meaning he will not face criminal charges. The SEC document stated Mickelson and two other relief defendants had “been unjustly enriched and must disgorge the amount of their ill-gotten gains.”

He has agreed to return the money, according to news.

—City News Service

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