The SEC slapped a senior Abbott (NYSE:ABT) executive and baseball great Eddie Murray with insider trading charges stemming from Abbott’s $2.8 billion acquisition of Advanced Medical Optics in 2009, according to the Wall Street Journal.
The federal securities watchdog accused Murray and former AMO CEO James Mazzo, now a senior vice president for the Abbott subsidiary, of leaking news of the deal ahead of its consummation, the newspaper reported. "Steady Eddie" Murray won fame as an unflappable player for the Baltimore Orioles and was elected to baseball’s Hall of Fame in 2003.
Murray allegedly learned of the impending deal from former teammate Doug DeCinces, eventually netting about $235,000 via the insider trading. He agreed to pay roughly $358,000 to settle the charges, although Murray admitted no wrongdoing. Mazzo is charged with tipping off DeCinces, his neighbor in Laguna Brach, Calif., according to the Journal. The SEC also accused DeCinces of telling at least 4 others about the AMO/Abbott deal.
"Mr. Mazzo flatly and unequivocally denies the SEC’s allegations," attorney Richard Marmaro told the newspaper. "Mr. Mazzo never disclosed material, non-public information to anyone – not to give a trading advantage to a friend, not for any reason."
"This is a personal matter for Mr. Mazzo and he remains an employee of the company until his already announced retirement at year-end," an Abbott spokesman said in prepared remarks, the Journal reported. Rumors of the more than 3-year probe into Murray’s involvement first surfaced in June.
DeCinces agreed to pony up $2.5 million last year to settle SEC charges that he began purchasing AMO shares based on information from someone inside the company and tipped 3 others who also traded on the confidential information. DeCinces did not admit to any wrongdoing in the settlement.
The probe was spurred by the conviction of Galleon Management hedge fund founder Raj Rajaratnam (who was convicted last year of 14 counts of conspiracy and securities fraud and is serving an 11-year prison sentence). Investigators have turned up leaks about the Advanced Medical Optics deal from a number of sources, according to the news service, including people who worked for AMO, its law firm, Skadden Arps and its merger adviser, Goldman Sachs Group. Other suspected leakers include Goldman Sachs managing partner Matthew Korenberg and Paul Yook, a former portfolio manager at Galleon.