The former LA Angels third baseman was found guilty today of insider trading in a Santa Ana U.S. District Court room.
Doug DeCinces, who played for the LA Angels (California Angels during his playing days) from 1982 – 1987, had been charged back in 2012. The thirteen count indictment had accused the 66-year old former all-star of receiving tips from a neighbor that eventually led to the former player netting $1.3 million in profits.
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James Mazzo was the Chief Executive of Advanced Medical Optics Inc. In 2008 the company was struggling to stay afloat. With mounting debt, the company was eventually acquired by the larger Abbott Laboratories in 2009.
By the time Abbott’s acquisition, DeCinces and a friend, Dave Parker, had bought large amounts of AMO stock. When Abbott’s purchase was made public, it was revealed they had bought the company for four times the value of the shares. Advanced Medical Optics stock shot up 143% of its purchase value.
The dramatic spike in value put DeCinces and Parker in a position to profit. The charges alleged that DeCinces received tips from his neighbor Mazzo that led him to buy more stock. DeCinces already owned stock, but increased his stock in AMO just prior the sale to Abbott. Similarily, Parker bought 25,000 shares, selling them after the merger for just under $350,000.
DeCinces gains were much more robust, garnering him the previously mentioned $1.3 million. However, DeCines agreed to a settlement with the US Security and Exchange Committee back in 2011. The settlement did not include a denial nor confession. The settlement did include DeCinces agreeing to pay $2.5 million to settle the allegations that he made huge profits after the merger.
While DeCinces (and Parker) has yet to be sentenced, he is now facing the possibility of a 10-year prison sentence.