An insider trading lawsuit alleges Phil Mickelson made $931,000 on the back of "non-public information".
Phil Mickelson has been named as a "relief defendant" in a lawsuit accusing two other individuals of insider trading, with the golfer claimed to have made $931,000 after being fed "non-public information".
According to the suit, filed by the Securities and Exchange Commission in the United States, Mickelson received tips from controversial sports gambler William 'Billy' Walters, who is close friends with Dean Foods chairman Thomas Davis.
The suit claims "Mickelson had placed bets with Walters both before and after July 2012 and owed Walters money" when Walters called Mickelson to discuss Dean Foods stocks.
"At a time when Walters was in possession of material nonpublic information regarding Dean Foods, Walters communicated with Mickelson and urged Mickelson to trade in Dean Foods stock, which Mickelson did the next trading day in three brokerage accounts he controlled," the suit continues.
"About one week later, Dean Foods's stock price jumped 40 per cent on the announcements of the WhiteWave spin-off and strong second quarter ("Q2") 2012 earnings, allowing Mickelson to profit by approximately $931,000."
Mickelson bought, partially on margin, 200,240 Dean Foods shares valued at $2.4million, the suit claims. Not only was this Mickelson's first purchase of Dean Foods stock, but it also was far more valuable than the rest of his brokerage account holdings, which were valued at less than $250,000, according to the suit.
The suit, which names Davis and Walters as defendants, says all relief defendants, of which Mickelson was one, "received gains from trades based on material nonpublic information, over which they each have no legitimate claim" and "have been unjustly enriched and must disgorge the amount of their ill-gotten gains."
Mickelson responded quickly agreeing to pay back his profits gained from the tip, according to a statement from his attorney.
A relief defendant is defined by USLegal.com as "a person or entity who has received ill-gotten funds or assets as a result of the illegal acts of other named defendants".
Mickelson has struggled on the PGA Tour recently, missing three cuts in his last four events.