Ex-baseball pro DeCinces testifies in insider trading trial

January 18, 2018 By Brad Perriello Leave a Comment

Former professional baseball player Doug DeCinces reportedly testified this week in the second trial of friend and neighbor James Mazzo, the former Advanced Medical Optics CEO accused of insider trading ahead of Abbott‘s (NYSE:ABT) $2.8 billion AMO acquisition in 2009.

Federal prosecutors in 2014 accused Mazzo of tipping former Orioles and Angels player DeCinces about the upcoming merger (Abbott 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 and was found guilty of insider trading in May 2017.

Judge Andrew Guilford of the Central California court initially declared a mistrial in Mazzo’s case after a jury deadlocked on the charges against him. But 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.”

After failing to win a bid for dismissal of the second case brought against him last year, Mazzo went to trial again in the California Central court.

In yesterday’s testimony DeCinces confirmed that he bought AMO on Jan. 5, 2009, a day after meeting Mazzo for dinner, according to the LA Times.

After the meal, DeCinces said Mazzo asked if he was comfortable with how much AMO stock he owned.

“Very comfortable,” DeCinces said he replied. “‘This is a once-in-a-lifetime opportunity,'” Mazzo responded, according to DeCinces.

“As we were leaving, [Mazzo] mouthed the words, ‘Buy more,'” DeCinces said, according to the newspaper. “Based on what I heard the night before, I felt like I did not have enough stock.”

Mazzo’s attorney, Richard Marmaro, then questioned DeCinces’ credibility based on his own trial last year.

“When your lawyer said that Mr. Mazzo never provided insider information, was that the truth?” Marmaro asked DeCinces.

“No,” DeCinces answered.

“Was your attorney not acting without your authorization?” the defense lawyer asked.

“I cannot control what my attorney says,” DeCinces replied, adding that he was “very worried” after making the trades, the paper reported.

“I felt I made a huge mistake,” he said. “At that point, there was nothing I could do to take it back.”

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