Where Does Phil Mickelson Go To Get His Reputation Back?

Two weeks ago, the New York Times and Wall Street Journal reported that golfer Phil Mickelson was under investigation by the SEC and FBI on suspicion of insider trading in Clorox stock.  According to the initial reports, the federal authorities suspected that (1) billionaire investor Carl Icahn had tipped Las Vegas high roller Billy Walters that Icahn was about to step up his pursuit of a takeover of Clorox, (2) Walters, in turn, had tipped Mickelson about Icahn's plans for Clorox and (3) Mickelson had engaged in options trading on Clorox to take advantage of his insider information.  The Wall Street Journal followed up with a story that the Feds were about to seek a wiretap on Mickelson when their plans were scotched by disclosure of the investigation.  Over the last weekend, the New York Times published a story by James B. Stewart speculating on the reasons why a highly successful athlete like Phil Mickelson might engage in insider trading.

Mickelson has steadfastly insisted that he did nothing wrong and that he has been cooperating with the investigation.  The reports should have listened and held their fire.

It turns out that Phil Mickelson never traded in Clorox options.  The reporting was wrong, and has been retracted by the New York Times. All that is left of the story is the report that Phil Mickelson is still being investigated for trading in Dean Foods - an unrelated company - that has no connection with Carl Icahn.

As I wrote at the time, Phil Mickelson's reputation had been "cloroxed."  He was particularly vulnerable to these leaks because his sponsors - KPMG and Barclays - were highly regulated by the SEC and cannot afford to be tied to an insider trading scandal.  It was wrong for the FBI and SEC to accost Mickelson in front of reporters two weeks ago.  It was wrong for the New York Times and Wall Street Journal to report as a fact that Mickelson had traded in Clorox options.  They had to know that the story would splash across every newspaper, blog and website.  After literally thousands of stories have been filed, there is no way for Mickelson to undo the clorox stain upon his reputation.

I have no idea whether Mickelson engaged in any wrongdoing with regard to Dean Foods, but the investigation should not be public.  It is wrong for the government to leak information about an investigation before charges (civil or criminal) are filed in court.