The defendants in an insider trading case yesterday asked a federal judge in California to acquit them of all charges, arguing that the government failed to show any evidence that they traded on inside dope about Abbott‘s (NYSE:ABT) $2.8 billion acquisition of Advanced Medical Optics in 2009.
Federal prosecutors in 2014 accused ex-Advanced Medical Optics chief James Mazzo of tipping close friend and neighbor Doug DeCinces about the deal. DeCinces, a former professional baseball player for the Baltimore Orioles, allegedly passed the information on to former teammate Eddie Murray. (Murray later agreed to settle his case for $358,000 but admitted no wrongdoing.) DeCinces agreed in 2011 to pony up $2.5 million (but admitted no guilt) to settle similar charges leveled by the SEC.
After 16 days of trial ended March 31 with a continuation until tomorrow, Mazzo, DeCinces and co-defendant David Parker all argued for acquittal, according to court documents.
“This insider trading case is extraordinary – not because of the evidence that does appear in the record, but because of what does not. After 4 weeks of trial, the record includes dozens of stock trades and hundreds of telephone records, as well as emails, exhibits, and witnesses describing dinners, hockey games, golf games, barbeques, and charity events attended by defendant James V. Mazzo, defendant Douglas V. DeCinces, their wives, and various friends and family,” Mazzo argued in his acquittal motion [emphasis theirs]. “Yet after 8 years of investigation and testimony from 17 witnesses: There is no evidence of any conversation between Mr. Mazzo … and his friend and neighbor Mr. DeCinces regarding a potential transaction between AMO and Abbott – no phone calls, no emails, and no witnesses.”
“Even the government’s own summary witness admitted that the government cannot say whether Mr. Mazzo and Mr. DeCinces were on any of the alleged phone calls, let alone what was said,” DeCinces argued in his motion.
Mazzo, now global ophthalmology president at Carl Zeiss Meditec (ETR:AFX) after a 3-year run as president and CEO at AcuFocus, argued that there is “no evidence” of him “lying, cheating, or hiding anything.”
To the contrary, evidence from those who know Mr. Mazzo best suggests that he is not the sort of person who would do such a thing,” he argued, according to the documents.
“Putting aside the government’s rhetoric, there is no link between Mr. Mazzo and the trades in this case. Instead of relying on concrete evidence, the government piles unsupported inference upon unsupported inference, hoping that speculation will suffice in this criminal case. The government’s case rests on a series of unsupported assumptions: because Mr. Mazzo and Mr. DeCinces were friends and talked on occasion, Mr. Mazzo must have told Mr. DeCinces material, nonpublic information about the AMO-Abbott transaction; because Mr. DeCinces traded in AMO stock, he must have relied on inside information; because Mr. DeCinces was enthusiastic about the stock in early January, he must have known exactly what was going on within AMO. None of these inferences are supported by evidence, and none would convince a rational juror of guilt beyond a reasonable doubt,” Mazzo argued in his motion.
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