By Norm Pattis
New Haven Register
I have no idea whether Phil Mickelson, one of the world’s premier golfers and three-time winner of the Masters golf tournament, is guilty of insider trading. But the mere fact that we are talking about it tarnishes his reputation. And why are we talking about it? The FBI has made public sport of stalking him.
It all has to do with the price of Clorox stock. In 2011, Mickelson and several others, including a big-time sports bettor from Las Vegas named William Walters, made millions virtually overnight on well-timed stock trades, according to reports published in The New York Times and elsewhere.
How’d they do that? They bought and sold shares just before billionaire Carl C. Icahn announced a takeover bid for Clorox, driving up the price of the shares.
The Securities and Exchange Commission spotted the transactions, and, apparently, federal investigators decided to look more closely at Mickelson, Walters and Icahn, suspecting more than mere serendipity accounted for the windfall.
Insider trading is what criminal defense lawyers call “white-collar crime.” In terms of a bygone era, these offenses are the sort committed by folks who don’t get their hands dirty while working for a living.
Insider trading is basically a form of rigging a market. Information is shared among favored parties before some event affecting a stock’s value is announced on the open market. Those privy to the secrets get a jump on the market.
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