Former Advanced Medical Optics CEO James Mazzo and the U.S. Securities & Exchange Commission agreed to settle insider trading charges related to AMO’s $2.8 billion acquisition by Abbott (NYSE:ABT) in 2009, after two previous trials ended in hung juries.
Mazzo agreed to pay $1.5 million but admitted no wrongdoing in the settlement, the SEC said.
Federal prosecutors in 2014 accused Mazzo of tipping a close friend and neighbor, former Orioles player Doug DeCinces, about the then-pending merger (Abbott subsequently sold the business to Johnson & Johnson (NYSE:JNJ) for $4.33 billion last year). DeCinces allegedly passed that information on to former teammate Eddie Murray, who 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.
A California federal judge in May 2017 declared a mistrial in Mazzo’s first trial, after a jury deadlocked over the charges against him. That jury also convicted DeCinces and a business associate on charges of tender offer fraud, despite deadlocking on other charges against DeCinces and all of the charges against Mazzo.
Mazzo, now global ophthalmology president at Carl Zeiss Meditec (ETR:AFX) after a 3-year run as president and CEO at AcuFocus, had argued that there is “no evidence” of him “lying, cheating, or hiding anything.” In February a new jury once again hit deadlock in the second trial, prompting another mistrial; a third trial is now off the table.
The settlement includes provisions barring Mazzo from “violations of the antifraud and tender offer provisions of the [Securities Exchange Act of 1934]” and imposing a five-year officer-and-director bar, the securities regulator said.