Is SEC Making an Example Out of Mickelson?, With Joe Gleason, Financial Advisor, Surprise, Arizona

Carl Icahn, a well-known Wall Street investor and activist shareholder, has allegedly told legendary sports gambler Billy Walters that he was making a play for Clorox. According to the SEC, Walters, in turn, told golfer Phil Mickelson, after which they both made bets on Clorox at the time.  Ichan is claiming that he is not an insider, rather an outsider in this case.

The Securities Exchange Act defines an insider as anyone who's a director, an officer, or a principal stockholder of affiliated companies, says Joe Gleason, Gleason Financial Group in Surprise, Arizona.    Carl Icahn, in running a hedge fund, has fiduciary responsibilities with people for which he's managing the money.  Having not actually taken over Clorox, in Gleason's mind, that doesn't qualify him as an insider.  This inquiry that's been going on for the past couple of years could be looking at someone like Phil Mickelson, who's a household name, and making an example out of him.  Similar to Martha Stewart, Gleason believes the SEC uses household names to make examples so this sort of thing doesn't happen.

Gleason is curious what the SEC is thinking Mickelson did, regardless of the sizeable amount that's involved.  He finds it hard to believe that in the limited time he has outside of his golf career, that he's running some insider trading scheme involving a hedge fund that never even purchased Clorox.  

There have been situations where employees innocently learn of things, such as a janitor noticing papers on an executive's desk and then sharing the information with friends and family, prompting them to take action on it and then they're in trouble for insider trading.  Regardless of how innocent it may be, Gleason says that the SEC doesn't want to undermine consumer confidence.  

While insider trading can be good for some, for others, large trades can be detrimental.  And while insider trading is typically looked at as illegal activity, Gleason says there are actually legal forms of insider trading, as long as it's been disclosed to the SEC.

Joe Gleason is a financial planner with Gleason Financial Group in Surprise, Arizona.  He spoke with Retirement News Today during this interview.  Retirement News Today, a featured network of Sequence Media Group, provides online retirement news video content.

Common Mistake of Overestimating Your Tax Rate in Retirement

The New Approach To Retirement, With Journalist Dan Kadlec