Federal investigators are looking into whether Mickelson and Walters may have traded illegally on private information provided by hedge fund manager Icahn.
Read MoreIcahn, Mickelson trading probe slow to take shape
The probe centers on trades in Clorox by Walters and Mickelson as Icahn was making moves to access the company's board in 2011. After accumulating a 9.1 percent stake in Clorox, Icahn made a bid valued at more than $10 billion to buy the consumer products company, which sent stock soaring.
To Holwell, Icahn probably didn't have any insider information about Clorox. Someone at his firm, however, could have said something to someone, he said. Still, Holwell said a gap in the law that governs tender offers will make it difficult to pin blame on Icahn.
Read MoreClorox bet raised eyebrows days before Icahn bid
So why are federal officials only now investigating something that may or may not have happened years ago? Holwell said a delayed investigation is not all together unusual.
"Timing itself is not necessarily a negative here. The government has its statute of limitations and yes, it's starting to feel a little stale, but if they thought they could get the goods, [it] wouldn't stop them," he said.
The most striking thing about this probe is that it became public, Holwell said. The suspects have nothing to gain from leaking the investigation, he explained. "Some could say the government has leaked it to attempt to stir the pot and get information flowing," he said.
Either way, it remains to be seen what, if anything, will come of the probe.
"My guess? Smoke, not fire," he said.
—By CNBC's Drew Sandholm with Reuters.