Federal authorities in the US are investigating whether billionaire investor Carl Icahn, golf legend Phil Mickelson and Vegas gambling ace William “Billy” Walters took part in an insider trading scheme.
The FBI and the US Securities and Exchange Commission are examining a series of well-timed trades made by Mickelson and Walters, and questioning if Icahn played a role in sharing information about stocks, reports The New York Times.
Authorities are particularly interested in Icahn’s attempted takeover of consumer products company Clorox in July 2011, when the investor made a $10 billion offer that caused stocks to skyrocket.
The people briefed on the investigation, who spoke anonymously because they were not authorised to discuss the investigation, said Mickelson and Walters collectively reaped several million dollars betting on Clorox and one other stock, Dean Foods.
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The investigation, which has been underway for two years, examined whether Icahn tipped Walters off about the market movement, and whether Walters passed on the tip to Mickelson on at least one occasion.
Around the time of the trading, the Securities and Exchange Commission sent Icahn a routine request for information about his dealings in Clorox. The SEC is now examining phone records to see whether Walters spoke to Icahn shortly before the trades.
Even if Icahn did leak secret information about his firm’s intentions with Clorox, he may have done so legally, according to The New York Times. It would be illegal if he breached a duty of confidentiality to his own investors.
The Wall Street Journal reported on Friday that Icahn, one of the biggest names in investment, said suggestions he was involved in improper trading were “inflammatory and speculative”.
“We do not know of any investigation,” said Icahn. “We are always very careful to observe all legal requirements in all of our activities.”
Icahn acknowledged a business relationship with Walters but said that he did not know Mickelson personally.
The Washington Post reports golfer Mickelson is also denying involvement, releasing a statement on Saturday that read: “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.”
The Washington Post also reported Walters was reached by phone and asked to comment about the investigation but said, “I don’t have any comment about anything” and then hung up.
The New York Times notes it is not the first time Walters, who is often considered the most successful sports bettor in the US, has drawn federal scrutiny.
In 1992, he was acquitted of illegal gambling charges. Since then, the Nevada attorney general has charged Walters with money laundering stemming from his gambling operation, but courts dismissed that case.
The probe comes as part of the US government’s increased focus on insider trading, which has resulted in 85 convictions since August 2009.