Securities and Exchange Commission v. James V. Mazzo, David L. Parker and Eddie C. Murray, Case No. SACV-121327JST-(JPRX) (C.D. Cal. Aug. 17, 2011). A little more than a year ago, the SEC charged former professional baseball player Doug DeCinces and three others with insider trading. DeCinces and the three others settled the charges with DeCinces paying $2.5 million. On August 17, 2012, the SEC charged with source of the tips – James V. Mazzo, who was DeCinces’s friend and neighbor. The SEC charged two others who traded on inside information that DeCinces tipped to them – DeCinces’s former Baltimore Orioles teammate Eddie Murray and another friend David L. Parker. Murray made about $235,000 in illegal profits. Murray agreed to settle the charges against him without admitting or denying the SEC’s allegations by consenting to the entry of a final judgment permanently enjoining him from violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. Murray agreed to pay disgorgement of $235,314, prejudgment interest of $5,180, and a penalty of $117,657 for a total of $358,151.
The SEC’s case continues against Parker and Mazzo. Mazzo and DeCinces were good friends and lived in the same exclusive gated community in Laguna Beach. They also communicated frequently by e-mail and through phone calls. Mazzo was directly involved in an impending Advanced Medical Optics/Abbott transaction. Mazzo illegally tipped DeCinces, who made significant purchases of Advanced Medical Optics shares. Parker and DeCinces were friends and business associates. Parker bought Advanced Medical Optics stock on the basis of confidential information received from DeCinces about the impending transaction. Parker made approximately $347,920 when he sold the stock on the same day as the public announcement. Meanwhile, Murray used all of the available cash in his self-directed brokerage account to purchase Advanced Medical Optics stock on the basis of the confidential information that DeCinces tipped to him. Murray sold all of his shares following the public announcement.