Metropolitan News-Enterprise


Wednesday, December 23, 2015


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Ninth Circuit Broadens DeCinces Insider Trading Case

Panel Says Uncharged Acts Admissible to Show Ex-Baseball Star’s Intent




A district judge erred in excluding evidence of prior stock trades not alleged in the indictment as part of the government’s insider trading case against Doug DeCinces, the Ninth U.S. Circuit Court of Appeals ruled yesterday.

DeCinces, now 65, played Major League Baseball from 1973 to 1987 and was an American League All-Star in 1983, when he was the third baseman for the then-California Angels. Before turning pro, he played at James Monroe High School and Pierce College in the San Fernando Valley.

The athlete-turned-real estate developer allegedly made $1.3 million in illegal profits when Abbott Laboratories acquired Advanced Medical Optics, Inc. six years ago. The then-CEO of Advanced Medical Optics, James Mazzo, allegedly told DeCinces about the pending acquisition, and DeCinces alleged tipped several friends and associates about the transaction.

Also charged in the case are Mazzo; David Parker of Utah, Orange County real estate attorney Fred Scott Jackson, and Roger Wittenbach of Maryland. Parker, Jackson, and Wittenbach allegedly earned more than $700,000 in profits after being tipped by DeCinces.

Civil Settlement

DeCinces agreed to pay the government $2.5 million in 2011, without admitting wrongdoing, in order to settle a related civil case. Former Los Angeles Dodger and Baltimore Oriole Hall of Fame first baseman Eddie Murray was not charged with a crime, but agreed to a civil settlement of more than $350,000.

The government appealed earlier this year after U.S. District Judge Andrew J. Guilford of the Central District of California ruled that prosecutors cannot present evidence about trades of Advanced Medical Optics stock by DeCinces in 2006 and 2007.

Allegedly acting on tips from Mazzo that his company was preparing to acquire IntraLase, and later that it was going to make an offer to buy Bausch & Lomb, DeCinces sold $250,000 in stock in Mazzo’s company and bought and sold stock in the other two companies. Mazzo and DeCinces moved to exclude evidence of those trades on the grounds that the Bausch & Lomb transaction wasn’t described in the indictment, and that the InterLase trades were only mentioned in a superseding indictment filed after the statute of limitations had expired.


Guilford said the “other acts” evidence should be excluded under Rule 404(b) of the Federal Rules of Evidence, but that the government could seek to reargue its admissibility at time of trial.

The defendants argued that the government’s interlocutory appeal should be dismissed because Guilford’s ruling was tentative. But Judge Johnnie Rawlinson, writing for the Ninth Circuit, said the order clearly was one “suppressing or excluding evidence” and thus appealable under 18 U.S.C. §3731.

Under circuit precedent, Rawlinson explained, there is no finality requirement for a §3731 appeal. Guilford’s order, she said, is appealable under the plain text of the statute.

“The fact that the district court described its ruling as tentative is immaterial, as pretrial evidentiary rulings are generally tentative, in the sense that they are subject to reconsideration at trial,” she added.

Turning to the merits, Rawlinson concluded that the other-acts evidence may be offered “to show intent, plan, knowledge, or lack of mistake.” The evidence, she said, is material to the charges, is not remote in time, supports a determination that the pair engaged in insider trading, and relates to acts that “are essentially the same as the charged conduct.”

The judge went on to conclude that Mazzo’s cross-appeal from Guilford’s denial of his motion to dismiss a portion of the indictment charging him with securities fraud cannot be considered because it is not “inextricably intertwined” with the government’s appeal and the issue can be considered in a subsequent appeal if he is convicted.

Judge Susan P. Graber joined Rawlinson’s opinion, while Judge Paul Watford concurred separately.

The case is U.S. v. DeCinces, 15-50033.


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