Phil Mickelson agrees to repay almost $1 million allegedly made from insider trading

Phil Mickelson has agreed to repay nearly $1 million he allegedly made as a result of insider trading that has led to the arrest of two men but no criminal charges against the golfer.

The Securities and Exchange Commission and U.S. Atty. Preet Bharara announced separate criminal and civil charges Thursday. Mickelson was named as a “relief defendant” in the U.S. District Court case involving sports gambler Billy Walters and Thomas Davis, the former chairman of Dean Foods Co.

According to the complaint, Walters began receiving inside tips from Davis, a golfing buddy, in 2008. Davis allegedly gave him advance notice regarding the company’s upcoming quarterly earnings and a profitable spinoff — information that could be used to buy and sell company stock at a profit.

Authorities say Walters, 69, and Davis, 67, would sometimes converse in code, referring to Dean Foods by the name “Dallas Cowboys.”

In late July 2012, Walters allegedly placed a telephone call to Mickelson, urging him to trade in company stock.

“Mickelson had placed bets with Walters both before and after July 2012 and owed Walters money at the time of the telephone call,” the complaint states.

Mickelson, 45, allegedly purchased more than 200,000 shares of Dean Foods the next day using three brokerage accounts.

A week later, the stock’s value rose 40% on the strength of a quarterly earnings report and news of the spinoff. According to the complaint, Mickelson immediately sold his shares at a profit of about $931,000.

“Mickelson repaid Walters in September 2012, in part with the proceeds of his trading,” the SEC said.

Speaking Thursday at a Manhattan news conference, Andrew Ceresney, head of the SEC’s Enforcement Division, said, “Simply put, Mickelson made money that wasn’t his to make.”

Ceresney declined to explain why Mickelson was not part of the criminal case. Mickelson’s attorneys, Gregory B. Craig of Skadden, Arps, Slate, Meagher & Flom and Pat Swan of Jones Day, said in a statement that the golfer “was an innocent bystander to alleged wrongdoing by others that he was unaware of.”

Mickelson felt “vindicated” because he was not accused of violating securities laws, according to a statement issued by his management group. He also said he took “full responsibility for the decisions and associations that led him to becoming part of this investigation.”

Walters and Davis have been charged with securities fraud, wire fraud and conspiracy. Davis has also been charged with perjury and obstruction of justice.

david.wharton@latimes.com

Twitter: @LATimesWharton