Insider Trading—A Conversation with Dennis Farrah


Phil Mickelson made the news when there were suggestions that he was involved in insider trading with investor Carl Icahn and gamble William Walters. LBN reported on the matter in our June 3, 2014 video. In this report, tax advisor Dennis Farrah explains what the allegations are all about.

Dennis Farrah

Dennis Farrah

Farrah explains that the SEC rules are very specific about insider trading. Carl Icahn, an activist investor, was preparing to buy a lot of shares in Clorox. An action like that would cause the value of Clorox shares to rise. “Now that’s fine, if you keep that to yourself,” Farrah notes. But if you tell your friends what you are planning to do and suggest that they buy the stock themselves, you have engaged in insider trading.

The SEC wants to know why Walters and Mickelson bought Clorox stock before the announcement was made that Icahn was interested in Clorox. And insider trading is a serious issue for those accused of it. The men involved “could be facing up to twenty years in prison” as well as very large fines. Farrah points out that the whole purpose of investing is to put money into businesses to create jobs and generate profits. Investment “is not to be used as a Las Vegas crapshoot.”

Dennis M Farrah, owner and president of Farrah Tax Advisory Group, has been providing financial planning, estate planning, and retirement planning for 25 years and has been operating in the Denver metro area for 30 years. As a financial advisor in Denver, he has helped many people get the best value for their money. Dennis has recently opened a second office in the Colorado Springs area to better service clients in the southern part of Colorado. The Legal Broadcast Network is a featured network of the Sequence Media Group.