James Mazzo, the former Advanced Medical Optics CEO who was indicted 2 years ago, wants a federal judge to agree to a stay pending a U.S. Supreme Court decision this fall over issues he claims could affect the insider trading charges alleged in his case.
Mazzo was indicted in September 2014, stemming from Abbott‘s (NYSE:ABT) $2.8 billion acquisition of AMO in 2009. Prosecutors accused Mazzo of tipping close friend and neighbor Doug DeCinces about the deal. DeCinces, a former baseball player for the Baltimore Orioles, allegedly passed the information on to former teammate Eddie Murray, who 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.)
In court filings this month, Mazzo argued that the Supreme Court’s upcoming decision in Salman v. United States “will directly and significantly affect the charges” against him. Salman, which is slated to be ready for oral argument before the high court in October, hinges on whether prosecutors must prove that a defendant benefitted from the alleged insider trading to make the charges stick.
“It also will materially affect the jury instructions, the evidentiary determinations, and a wide range of trial decisions by the defendants, the government, and the court. Although Mr. Mazzo has consistently demonstrated his readiness to begin trial, and to establish his innocence on the unfounded charges, Mr. Mazzo recognizes that this limited stay will contribute significantly to an orderly adjudication; will avoid unnecessary and wasteful proceedings and conserve judicial resources; will spare the parties significant unnecessary hardship and expense; and will serve the best interests of the court and the parties. The trial in this case could be promptly rescheduled after the Supreme Court issues its decision in Salman,” Mazzo argued, according to court documents.
Prosecutors countered that Mazzo’s motion “grossly overstates” the impact of Salman on his case and fails to establish sufficient hardships or waste of judicial resources “even under the erroneous civil standards he proposes,” according to the documents.
Mazzo’s motion also ignores the Speedy Trial Act and relies on a Louisiana federal court decision that doesn’t apply, the prosecutors argued.
Trial in the case is scheduled to begin July 19, unless Judge Andrew Guilford of the U.S. District Court for Central California agrees to stay the case. Last year Guilford denied prosecutors’ request to disqualify the law firm representing Mazzo, despite misrepresentations by a former lawyer for Skadden Arps Slate Meagher & Flom.
