(USA TODAY) 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."
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.