Report: FBI, SEC probe Icahn, Mickelson and Walters

Report: FBI, SEC probe Icahn, Mickelson and Walters

Report: FBI, SEC probe Icahn, Mickelson and Walters

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by Beth Belton, USA TODAY

KING5.com

Posted on May 31, 2014 at 6:00 PM

Updated Saturday, May 31 at 6:00 PM

Federal investigators have launched what the Wall Street Journal is calling "a major insider-trading probe involving finance, gambling and sports" that involves the trading of activist investor Carl Icahn, pro golfer Phil Mickelson and Las Vegas bettor William "Billy" Walters.

According to a story published on the Journal website late Friday, the Federal Bureau of Investigation and the Securities and Exchange Commission are probing whether Mickelson and Walters illegally traded on nonpublic information they allegedly obtained from Icahn about his investments in public companies. The Journal story attributed the information to "people briefed on the probe."

The feds are said to be investigating whether the past three years Icahn illegally provided Walters — well known in Vegas for his sports-betting abilities — about potentially market-moving investments by Icahn's company, Icahn Enterprises, the Journal story said.

Icahn, Mickelson and Walters are quoted in the article as denying any knowledge of a probe or declining comment.

"We do not know of any investigation," Mr. Icahn told the Journal Friday. "We are always very careful to observe all legal requirements in all of our activities." The suggestion that he was involved in improper trading, he said, was "inflammatory and speculative."

Mickelson is in Dublin, Ohio, playing The Memorial presented by Nationwide Insurance. He shot 70 on Friday to make the cut and is scheduled to tee off Saturday at 10:27 am ET.

Early Saturday, he released the following statement: "I have done absolutely nothing wrong. I have cooperated with the government in this investigation and will continue to do so. I wish I could fully discuss this matter, but under the current circumstances it's just not possible."

Citing anonymous sources, the Journal story said the government probe started three years ago after Icahn accumulated a 9.1% stake in Clorox in February 2011. On July 15, 2011, he made a $10.2 billion offer for Clorox that caused the stock to jump.

"Well-timed trading around the time of his bid caught the attention of investigators, who began digging into the suspicious trading in Clorox stock, the people familiar with the probe said," according to the Journal article.

Clorox ultimately rejected Icahn's bid. He later launched a proxy battle, proposing a slate to replace the company's board with 11 of his nominees. In September 2011, he ended the proxy fight and by year-end had sold his Clorox stake.

According to the Journal, "the investigators later expanded their probe to look at trading patterns by Walters and Mickelson relating to Dean Foods, said the people briefed on the probe.

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