Former Oriole’s Ballplayer Indicted for Insider Trading, Securities Fraud

Former Oriole’s Ballplayer Indicted for Insider Trading, Securities Fraud

By Christina Drury

Following the heels of a settlement in 2011, Doug DeCinces – a former third baseman for the Orioles – has recently been indicted on insider trading and securities fraud charges. The insider trading charges are related to an Orange County medical company that DeCinces allegedly had inside information on in 2011. As a result, the former ballplayer was able to cash in on this information for a hefty sum. While he paid over $2.5 million in a settlement in 2011, his lawyer contends that he should not have been brought up on criminal charges.

Financial Benefits from Insider Trading Lead to Charges

In 2008, DeCinces was allegedly made aware by an insider at Advanced Medical Optics, Inc. that the company was about to be acquired by Abbot Laboratories. As a result of this information, DeCinces purchased a large share of stock – 90,700 shares to be exact – and urged three of his friends to do the same in order to benefit. After the acquisition, the company’s shares skyrocketed from $8 per share to $22 per share, resulting in a hefty windfall for DeCinces and his friends.

James Mazzo, the former CEO and former chairman of Advanced Medical Optics was not named in the indictment as the source of the information, but is listed on the SEC’s investigation report. Apparently, Mazzo and DeCinces are close friends, neighbors and even vacation together. Reports show that in the days that were leading up to the acquisition of Advanced Medical by Abbot Laboratories, the two had often spoken.

As a result of the insider trading information and the SEC fraud, DeCinces gained $1.3 million, but it was all considered to be illegal profit. His friends that he made privy to the information also benefitted, in the hundreds of thousands of dollars range.

Among the many counts that are filed against DeCinces and his three friends include a total of 60 charges – 43 of which are being filed against DeCinces directly. All parties involved in this insider trading lawsuit deny any wrongdoing, despite the fact that they each paid to settle. It is not uncommon for criminal charges to be filed, even after civil lawsuits are settled.

If convicted on the SEC fraud charges – which include Insider trading, tender offer fraud and money laundering – each of the men will be subject to prison time. The securities fraud charges alone each carry a sentence of 20 years in prison while money laundering can land them in prison for up to 10 years per charge.

All four defendants in this securities fraud, insider trading case is set to be arraigned on December 17, 2012 in Santa Ana, California.

Were you a victim of stock fraud, securities fraud or investment fraud? You may have a case to file class action lawsuit against the parties responsible. Visit the Securities Fraud, Stock Fraud Investment Class Action Lawsuit Investigation for details.

Updated December 12th, 2012

All securities fraud class action and lawsuit news updates are listed in the Stocks & Securities section of Top Class Actions