SEC Settles Claims Against James V. Mazzo Former Chairman/CEO of Advanced Medical Optics, Inc.

The SEC announced on November 14, 2018, that it has agreed to resolve its insider trading claims against James Mazzo, the former Chairman and Chief Executive Officer of Advanced Medical Optics, Inc.for allegedly tipping information about his company’s acquisition to his close personal friend, former professional baseball player Douglas V. DeCinces.

The SEC’s complaint alleged that in October 2008 James Mazzo executed a nondisclosure agreement with Abbott Laboratories, Inc., as Abbott explored a potential acquisition of Advanced Medical Optics. Talks between Advanced Medical Optics and Abbott Laboratories progressed over the ensuing months. James Mazzo provided Douglas DeCinces with material, nonpublic information about the acquisition on multiple occasions. The complaint further alleges that Douglas DeCinces bought between Advanced Medical Optics securities numerous times after communicating with James Mazzo about the progress of the merger talks. Douglas DeCinces also allegedly tipped five of his friends, including a former Baltimore Orioles teammate and a businessman, David L. Parker. Douglas DeCinces’s trading resulted in over $1.3 million in alleged ill-gotten gains, and the tippees obtained another $1 million in ill-gotten gains.

Without admitting or denying the allegations, James Mazzo agreed to a final judgment that includes a permanent injunction from violations of the antifraud and tender offer provisions of the Exchange Act, orders James Mazzo to pay a civil penalty in the amount of $1.5 million, and imposes a five-year officer-and-director bar. The settlement is subject to final approval by the court.

Douglas DeCinces and four of his tippees already settled the Commission’s insider trading claims against them. The Commission’s litigation against David Parker is continuing.

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