Browsing: offshore

A new report from the financial publication Hunterbrook alleges Phil Mickelson received inside information on an investment in an offshore oil company and distributed that information to a private group of company shareholders.

On Friday, Hunterbrookreleased a story that included a series of private messages shared by Mickelson with a group of investors for the Houston-based oil startup Sable Offshore. In the messages, Mickelson appears to share material non-public information gleaned from interactions with Sable Offshore CEO Jim Flores — a decision that could have legal ramifications for Mickelson, the company’s chief executive, or both.

The three-bylined story centers on the latest actions of the embattled oil company Sable Offshore, which paid $988 million to assume control of a troubled oil field from Exxon off the coast of Santa Barbara, Calif., and quickly attracted investors seeking a potential moonshot.

From the beginning, the Sable business was predicated on a calculated gamble: If Flores could restart production from the Santa Ynez offshore oil infrastructure — a collection of three offshore platforms, a processing facility and a pipeline system that were shuttered after an environmental disaster in 2015 — the near-billion-dollar investment would look like a steal.

But the 20 months since the company’s creation have been far rockier than investors hoped. Sable Offshore’s efforts to protect against future environmental disasters have hit a series of regulatory snags in the last year and a half. To date, the company has failed to restart production on the oil infrastructure, causing Sable Offshore’s stock price to tumble more than 53 percent over the last 12 months.

Mickelson’s involvement in the company has been highly publicized. The LIV Golf star has tweeted more than 100 times about Sable Offshore over the 20 months, many of them aimed at California legislators and regulators involved in keeping oil production shuttered.

Mickelson’s own past with insider trading is well-documented. In 2016, he paid more than $1 million to the Securities and Exchange Commission to settle allegations that he had traded on inside information gleaned from the legendary gambler Billy Walters.

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The Hunterbrookstory alleges Mickelson was more than just a disgruntled investor, revealing the contents of an X group (previously Twitter) that appears to show the six-time major champ sharing information taken from Flores before it was made public.

“I spoke to Jim this morning. An announcement is coming today after market closes. It could be an 8K or press release,” Mickelson wrote to a group of Sable investors on X on Sept. 29, hours before an announcement from the company indicating it had submitted paperwork to the state of California seeking permission to restart oil production. This was one of a handful of examples of non-public material information discovered in Hunterbrook‘s reporting.

The Hunterbook story also appeared to show Mickelson involved in a coordinated effort to drum up federal support for the Sable Offshore project, a “prayer” that could reverse stalled oil production and rebound some of Sable’s sunken stock price. A leaked phone call quoted in the Hunterbrookstory appears to show Sable Offshore CEO Jim Flores discussing a “west coast game” between “a certain left-handed golfer” and current U.S. Commerce Secretary Howard Lutnick. (Lutnick refuted that he had plans to play with Mickelson, and said he’d never heard of Sable Offshore.)

The legal implications of Mickelson’s involvement in the story remain uncertain. U.S. insider trading law stipulates that the transfer of material non-public information is not itself illegal, so long as the information is not traded upon. On Friday afternoon, Mickelson replied to several tweets about the story with a similar defense, arguing that he did not trade on the information he received, and that his actions in the story did not “insinuate wrongdoing.”

If Mickelson’s X counterparts traded on material non-public information gleaned from him, Mickelson could still be found legally liable under U.S. insider trading laws surrounding “tipping” — though authorities would have to prove he benefited in some way from those trades.

“So a company says I can’t say anything to you but we will announce something at the close,” Mickelson said, in one X reply. “I don’t know if it’s a dilution and the stock goes down or a deal for the stock to go up. I have to wait to see what the info is [sic], I make no trades whatsoever and am ultra ultra careful given past history. I don’t even share that information is coming til after the close.”

Mickelson also included an accusation of his own aimed at Hunterbrook, a financial journalism outfit whose unusual business orientation allows it to trade on information gleaned by its reporters, so long as it is not material non-public information. Hunterbrookdisclosed on social media that it had not made any trades based on the findings of the Sable Offshore story.

“This looks like stock manipulation on your part and slanderous,” Mickelson wrote. “Did you make any trades today?”

The story, which also suggested that Sable Offshore would soon have to raise $200 million in dilutive equity, sent stock prices plunging on Friday afternoon. At closing time, Sable Offshore was selling for $10.47 per share, down 18.47 percent from the day’s start.