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Ex-Angels player Doug DeCinces settles insider trading lawsuit

Settlement calls for former major leaguer Doug DeCinces to pay $2.5 million. The SEC had alleged DeCinces used inside information to garner big profits by trading Advanced Medical Optics stock.

August 05, 2011|By Stuart Pfeifer, Los Angeles Times
  • Former Angels player Doug DeCinces, acting on an illegal tip, bought more than 83,000 shares of Advanced Medical Optics in the weeks leading to its 2009 acquisition by Abbott Laboratories Inc., according to SEC allegations. DeCinces, 60, of Laguna Beach played major league baseball from 1973 until 1987. He is now president and chief executive of a real estate development firm in Irvine.
Former Angels player Doug DeCinces, acting on an illegal tip, bought more… (Loomis, Rick, Los Angeles…)

Former Angels baseball player Doug DeCinces has agreed to pay $2.5 million to settle allegations that he used inside information to score big profits trading the stock of Santa Ana-based Advanced Medical Optics Inc.

The Securities and Exchange Commission announced the settlement Thursday. Authorities said DeCinces, acting on an illegal tip, bought more than 83,000 shares of Advanced Medical Optics in the weeks leading to its 2009 acquisition by Abbott Laboratories Inc.

Shares of Advanced Medical Optics increased 143% after a public announcement in January 2009 that it would be acquired by Illinois-based Abbott. DeCinces made more than $1.2 million in profit through his trades of Advanced Medical, the SEC said.

DeCinces, 60, of Laguna Beach played major league baseball from 1973 until 1987. He is now president and chief executive of a real estate development firm in Irvine.

According to the SEC lawsuit, DeCinces received word of the pending acquisition from an employee of Advanced Medical Optics. He started buying shares of the company stock almost immediately, the SEC said, adding them to his personal holdings and to accounts in the names of his grandchildren. On one occasion, the SEC said, DeCinces liquidated a portfolio of 110 stock holdings and used the proceeds to buy more Advanced Medical Optics stock.

"It's very disappointing because you would think for somebody as financially secure as him, he wouldn't need to engage in something that's very, very harmful," said Daniel M. Hawke, chief of the SEC's market abuse division.

"It's commonly thought that insider trading is a victimless violation. Well, somebody had to sell him the stock without having the information he had. Would they have sold him the stock if they knew what he knew?"

Hawke declined to say what prompted the SEC investigation of DeCinces' trades. He also would not say whether a parallel criminal investigation was underway.

Neither DeCinces, nor his attorney, Rick Firestone, could be reached for comment. DeCinces agreed to the settlement without admitting or denying the SEC's allegations, the SEC said in a news release.

The SEC said DeCinces also illegally tipped three associates who traded on the confidential information: physical therapist Joseph J. Donohue, real estate lawyer Fred Scott Jackson and businessman Roger A. Wittenbach.

The three associates also agreed to settle without admitting or denying the SEC's allegations. Under a settlement not yet approved by the court, Donohue would pay $113,000, Jackson $293,000 and Wittenbach $422,000, the SEC said.

DeCinces hit 237 home runs during a 15-year career in the major leagues. He played with the then-California Angels from 1982 to 1986. He also played for the Baltimore Orioles and St. Louis Cardinals.

stuart.pfeifer@latimes.com

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