Former CEO of O.C. company charged with insider trading

A federal grand jury indicted the former chief executive of an Orange County medical device company on insider-trading charges for allegedly tipping his friend, former Angels player Doug DeCinces, to company secrets that moved the stock market.

James V. Mazzo, 57, former chief of Advanced Medical Optics Inc., was accused of telling DeCinces of the company’s imminent acquisition by Abbott Laboratories in 2009, before the deal was disclosed to the public.

Prosecutors say that DeCinces used the information to acquire a major holding of Advanced Medical Optics stock. When the acquisition was announced, Advanced Medical Optics shares surged 143%. DeCinces later sold his shares at a profit of about $1.3 million, according to the indictment, which a grand jury returned Wednesday.

DeCinces, who played 14 years in the major leagues, was indicted on criminal insider-trading charges in 2012. He pleaded not guilty to the charges and his trial is scheduled for February.

In 2011, the former ballplayer paid $2.5 million to resolve a Securities and Exchange Commission insider-trading complaint.

Mazzo’s attorney did not immediately respond to a request for comment. Prosecutors contend that Mazzo did not benefit financially from the tip but did it to benefit DeCinces, his close friend.

Assistant U.S. Atty. Stephen Cazares, who is handling the case, said it’s important to prosecute both the people who provide tips and those who profit from them.

“Insider trading can’t happen without insiders who are leaking information to the detriment of their companies and the company shareholders,” Cazares said.

It was not the first time Mazzo tipped off DeCinces to inside information, the indictment said.

In 2006, prosecutors alleged, Mazzo told his friend that his company was about to acquire IntraLase.

DeCinces purchased IntraLase shares ahead of the public announcement, then sold them after the news caused the company’s shares to rise, the indictment alleged. DeCinces made about $33,000 in profits on that trade, prosecutors said.