Former California Angels third baseman Doug DeCinces testified Wednesday that he bought shares in a friend’s eye-care company based on inside information about a restructuring of the corporation’s debt and a pending merger deal.
DeCinces, who was convicted in May of 14 counts of insider trading, said he struck a deal with prosecutors to testify against co-defendant James V. Mazzo, 61, in the hopes of receiving some mercy from U.S. District Judge Andrew Guilford at sentencing.
DeCinces was facing up to five years in federal prison, but prosecutors agreed to request two years behind bars based on his cooperation in Mazzo’s trial, DeCinces testified. He said prosecutors have made no promises to him, and the punishment is entirely up to Guilford.
When Assistant U.S. Attorney Jennifer Waier asked DeCinces why he struck the deal with the government, in which he waived his right to appeal his conviction, the 67-year-old ex-Angel said the pressure of what he did had taken its toll on his health.
“First and foremost, I’ve been living with this for eight plus years and … I felt like it was time to come out and get this off my shoulders,” he said.
Post-conviction, DeCinces said he has suffered “several medical issues.”
“It put me in a position to rethink a lot of things and listen to friends and family who came to me saying it was costing me my life holding all this pressure in,” DeCinces said. “Also, I believe strongly it was time to tell my story.”
DeCinces also testified how frightened he was as an investor during the Great Recession and in the fall of 2008, when the markets began to tank.
“It was very fearful for a lot of people at the time,” DeCinces said.
“And fearful for you?” Waier asked.
“Yes,” DeCinces replied.
DeCinces discussed emails back and forth with Mazzo, then chief executive of Advanced Medical Optics Inc., on the state of the markets. He also testified about his concerns for his friend’s well-being in a demanding CEO job as he recovered from cancer.
He said that on election day 2008, another friend, Dick Pickup, a wealthy stock broker from Orange County, told him that Mazzo had discussed saving his embattled company $90 million in a conference call with investors. Pickup was impressed and told DeCinces he intended to buy more stock and suggested DeCinces do the same.
DeCinces had bought stock in Advanced Medical Optics previously in 2006 and had to sell off the shares for a substantial loss of about $32,000, but purchased 3,500 shares in the company based on his friend’s advice, he said.
On Nov. 24, 2008, DeCinces picked up Mazzo at his office in Santa Ana so they could attend an Anaheim Ducks game at the Honda Center. During the ride to the hockey game, DeCinces testified that he asked Mazzo about the debt restructuring and if he had any plans to do more.
Mazzo said, “I’m hoping it could happen before the end of the year,” according to DeCinces.
Two days later, DeCinces said he bought another 3,500 shares, followed on Dec. 1 and Dec. 2 by 3,000 and 5,000 additional shares.
DeCinces also testified that he advised his physical therapist “in a less than 30-second conversation” to buy some stock in Mazzo’s company because it was restructuring debt at a savings and would continue to do so.
In last year’s trial, jurors deadlocked on all counts against Mazzo, 61, of Laguna Beach.
In January 2009, Mazzo allegedly tipped DeCinces about Advanced Medical Optics’ sale to Abbott Laboratories. DeCinces’ stockbroker advised him to sell, he said.
“I ended up selling, but at first I wasn’t sure that it was the right thing to do, but he insisted,” the ex-athlete testified.
He said he collected a little more than $1 million — the most he ever made on a publicly traded stock.
“I was very worried,” he testified. “I felt like I had made a very huge mistake and there was no way now that I could take it back.”
In February 2009, Mazzo walked over to his neighbor’s home and “dropped a few F bombs” as he discussed with DeCinces questions he received from regulators about the stock sales, DeCinces testified.
“I wasn’t happy either,” he testified. “My fears were becoming real.”
DeCinces testified that he took his $1 million profit and reinvested in firms recommended by Pickup.
DeCinces testified that he agreed to discuss the trades with AMO attorneys in March 2009, but left out that he did the deal in part based on the inside information from Mazzo.
“I was basically listening to Jim’s words — don’t tell anybody about this,” he testified.
Under questioning from Mazzo’s attorney, Richard Marmaro, DeCinces acknowledged that he had been denying that he received inside tips from Mazzo since his first indictment in 2012.
DeCinces parried with Marmaro on whether he lied during his trial last year as his attorney argued there was no evidence DeCinces received inside information from Mazzo.
“I cannot control what my attorney says,” DeCinces testified.
Marmaro asked DeCinces if it was lying when he left out the alleged tips he received from Mazzo when he spoke with the company’s attorneys in March 2009.
“I just left it out. I was following Jim’s instructions (not) to tell anybody,” he testified.
Marmaro asked DeCinces why he passed up multiple opportunities over the years to “unburden” himself of his crimes.
“I was in protection mode,” DeCinces testified. “I was protecting Jim, protecting myself and others.”
Marmaro replied, “So unburden mode hadn’t taken over, you were in protection mode?”
“Yes,” DeCinces replied.
DeCinces began testifying Tuesday, recounting his baseball career from when he began playing as an 8-year-old in the San Fernando Valley to the end of his professional career as a 38-year-old in Japan.
–City News Service