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Former Oriole Doug DeCinces charged with securities fraud, money laundering

Nov 29, 2012, 7:46 AM EDT

Doug Decinces

Back in 2011 former Orioles and Angels third baseman Doug DeCinces was charged with insider trading arising out of a tip he received regarding the buyout of a medical devices company by Abbott Labs. It was a civil charge, filed by the SEC, and he settled the charges for $2.5 million.

But civil charges weren’t good enough, it seems, because he has now been charged criminally in the matter: he was indicted yesterday on 42 counts of securities fraud and a count of money laundering. Each of the fraud counts carries a maximum sentence of 20 years in prison.

Obviously it’s hard to get details from an AP report, but unless this involves something totally different than the case which he settled (civilly, anyway) in 2011, I don’t know how you wring 42 charges out of it. He got a tip. He told a few friends. They bought stock and cashed out. About as simple as it gets.

He reportedly made $1.3 million out of the transaction so it’s possible that instead of one big buy he purchased stock in, like, 21 separate buys and the feds are charging each one. They tend to do things like that.

  1. mybrunoblog - Nov 29, 2012 at 7:51 AM

    Somewhere Eddie Murray is really worried.

  2. cur68 - Nov 29, 2012 at 7:53 AM

    Did the Martha Stewart, did he? Tut, tut. Did we learn nothing from Martha besides how to make coleslaw?

    • indaburg - Nov 29, 2012 at 9:07 AM

      Yep. I learned that you can go to jail for securities fraud and still be worth hundreds of millions, so it’s no biggie. Also, that “Cats Whiskers” is an actual color.

      • cur68 - Nov 29, 2012 at 9:16 AM

        “Cat’s Whiskers” is a colour and King of Prussia is a place. Right. Got it. Filed in my useless-fact mental sock-drawer in perpetuity now.

      • indaburg - Nov 29, 2012 at 9:59 AM

        Happy to oblige, but you only think it’s full. Just wait til your big-haired girl gives you an earful. Oy vey.

    • yahmule - Nov 29, 2012 at 9:37 AM

      Yeah, Martha Stewart is really the poster child for securities fraud, not the legion of politically connected white collar criminals who actually run this country.

      • cur68 - Nov 29, 2012 at 10:19 AM

        Easy there, Martha. That was good coleslaw. I am indeed grateful for it. Your troubles and so on were a mere aside to that, if you ask me. Next time though, just offer to shave your head in penance straight away rather than lawyer up and deny it all. Might save some time in the hoosegow.

      • yahmule - Nov 29, 2012 at 11:53 AM

        Or just be a man. Then the old boy’s network won’t feel compelled to make an example out of you.

      • Glenn - Nov 29, 2012 at 11:55 AM

        Just look at the net worth of our Congress people before and after their political careers. They all become very wealthy and it is not because of relatively modest salaries.

  3. kkolchak - Nov 29, 2012 at 8:01 AM

    Well, he does look really pleased with himself.

    • historiophiliac - Nov 29, 2012 at 9:17 AM

      It looks to be a nice tie.

  4. natslady - Nov 29, 2012 at 8:08 AM

    Apparently (allegedly) he not only used the information himself, but he passed it along.

    The indictment also names three friends of DeCinces to whom he provided the insider information to make up for previous investment advice that “had gone bad,” according to prosecutors.

    –Reuters

  5. Gordon - Nov 29, 2012 at 8:43 AM

    Craig, the type of activity he engaged in undermines the capital markets…so yeah, it’s kind of a big deal. He deserves to be criminally prosecuted on top of the civil judgment.

    If you don’t put these guys in jail, you turn into Russia, where a few oligarchs dominate the wealth in the capital system.

    • Craig Calcaterra - Nov 29, 2012 at 8:55 AM

      What possible basis do you have for saying I think he shouldn’t be prosecuted? I questioned the number of counts for what appears to be a very simple crime, nothing more.

      • yahmule - Nov 29, 2012 at 9:41 AM

        Isn’t it common for prosecutors to stack charges against defendants in most cases? The old see-what-sticks-approach? That’s sure as hell how things are done in Las Vegas. They want to intimidate people into accepting plea bargains because they’re afraid of being found guilty on 42 charges. Works like a charm on people with no money. The motto of the public defenders office in Vegas is, in late, out early and take a long lunch”. Many of the accused out here don’t even meet their court appointed lawyer until the day of their trial.

      • manchestermiracle - Nov 30, 2012 at 1:26 AM

        Craig, I disagree with your assertion that this is in any way “a very simple crime.” Sticking up the local mini-mart is a relatively “simple crime.” Insider trading is by its very nature a conspiracy to defraud multiple interests, from other investors and the companies involved to the federal government. That means you and me, since it requires our tax dollars to pursue and prosecute white-collar thieves like these.

        If I go on a bank-robbing spree I will eventually be caught and charged with each crime. Making multiple stock buys based on inside information is no different. Each time DeCinces bought a block of stock he was stealing. Each round of paperwork he filed on those purchases was fraudulent, including the use of multiple brokerage accounts (some of which he opened in his grandchildren’s names).

        DeCinces should get prison time for his crimes against the free market. When people make light of this type of criminal activity, it becomes obvious how it is possible for investment bankers to throw the entire world economy in a ditch, defraud the US taxpayer out of billions, and then go cash their multi-million dollar bonus checks. When small-fry crooks like DeCinces get (rightfully) hammered, but politically-connected big boys walk, then the system truly is blatantly corrupt.

    • lumpyf - Nov 29, 2012 at 9:07 AM

      And here I thought the wealth is the US was already dominated by a few. Thanks for clearing that up.

      • Old Gator - Nov 29, 2012 at 9:32 AM

        Well, that’s not quite it. In Russia, the wealth is controlled by oligarchs, Here, it’s controlled by crooks.

    • historiophiliac - Nov 29, 2012 at 9:20 AM

      Wow, the slippery slope to Russia is shoooort!

      • Old Gator - Nov 29, 2012 at 9:30 AM

        If it’s short for you, imagine how short it must be for Sarah Palin? Hell, she can already see it from her porch.

      • historiophiliac - Nov 29, 2012 at 9:39 AM

        You just know she’s a snoopy neighbor too. Probably sits on the front porch like my grandma so she can see who’s coming and going.

        Do you think they put up signs she can’t read just to annoy her?

      • yahmule - Nov 29, 2012 at 12:01 PM

        Sarah Palin? Kind of rings a bell. Sometimes she just seems like a bad dream we all had.

    • bpachol - Nov 29, 2012 at 12:55 PM

      Shame on you DeCinces, only Congress is immune to insider trading!

  6. nolanwiffle - Nov 29, 2012 at 8:54 AM

    It would appear Doogie has booked himself a room in the hard rock hotel.

  7. lumpyf - Nov 29, 2012 at 9:05 AM

    He made 1.2 million and paid a civil penalty of 2.5 million. DeCinces must be loaded.

  8. dirtyharry1971 - Nov 29, 2012 at 10:06 AM

    Great Fielder in his day, very sad to read this

  9. thomas2727 - Nov 29, 2012 at 10:32 AM

    What does not make sense to me is that Mazzo is the person that is alleged to have initially leaked the information.

    Why is he not being charged? It seems he should bear a great deal of the responsibility.

    Doug DeCinces sounds like the Bud Fox character from Wall Street. Only this wasn’t Teldar Paper

  10. flcounselor - Nov 29, 2012 at 8:45 PM

    “I don’t know how you wring 42 charges out of it. He got a tip. He told a few friends. They bought stock and cashed out. About as simple as it gets.”

    Craig, what qualifies you to be so glib about this? Or even comment at all?

    It is not as if you are some sort of constitutional scholar, are you? You are just a sports blogger, right? What do you really know about these laws?

    • Craig Calcaterra - Nov 29, 2012 at 9:12 PM

      I hope you’re either joking or new here.

      • flcounselor - Jan 16, 2013 at 10:56 PM

        New, yes. I did a little research, Craig, and learned that you actually are, in fact, a constitutional scholar. Great!

        So what is your professional opinion regarding the Fourteenth Amendment and some Congressmen calling for the U.S. to default rather than raising the debt ceiling? Are they in violation their oath of office?

  11. manchestermiracle - Nov 30, 2012 at 1:09 AM

    From the San Francisco Chronicle, about five hours ago:

    DeCinces, 60, was indicted yesterday in federal court in Santa Ana, California, with three friends accused of illegally profiting by $689,871 from his tips, according to U.S. Attorney Andre Birotte Jr. in Los Angeles. DeCinces paid $2.5 million in August to resolve a Securities and Exchange Commission civil lawsuit over his purchase of Advanced Medical Optics shares before it was acquired by Abbott Laboratories for $2.8 billion.

    A former Orioles teammate of DeCinces, Hall of Famer Eddie Murray, paid $358,151 in August to settle an SEC suit that said he profited from the tips. Murray denied wrongdoing in settling the case. Prosecutors didn’t charge him with any crimes.

    The indictment accused DeCinces of getting tips from a source identified as an officer and director of American Medical Optics who was involved in negotiations over the acquisition. The source was a close friend and neighbor of DeCinces and a member of his golf club. They vacationed together, and the source invested in a business run by a son of DeCinces, according to the indictment.

    The source learned of the deal through various meetings with insiders, including Abbott’s chief executive officer, according to prosecutors. The indictment outlines a series of meetings and phone calls in November and December 2008, when the source allegedly provided DeCinces with tips. DeCinces began buying the first block of Advanced Medical Optics shares on Nov. 5, 2008, and continued until Jan. 5, 2009, prosecutors said.

    DeCinces bought a total of 75,700 shares through various brokerage accounts, including four for his grandchildren, according to the indictment. On Jan. 12, after the Abbott acquisition was announced, Advanced Medical Optics shares rose 143 percent and DeCinces sold all of his holdings, prosecutors allege.

    An SEC complaint filed in August added Murray and two others to the case, including former Advanced Medical Optics CEO James V. Mazzo. The SEC identified Mazzo as the source. In a court filing yesterday, Mazzo denied providing material, nonpublic information to DeCinces. He demanded a jury trial.

    DeCinces is charged with 21 counts of insider trading and 21 counts of tender offer fraud. He also is charged with money laundering. He faces as many as 20 years in prison on the most serious charge.

    It would appear that this case is a bit more serious than Craig’s post makes it out to be. DeCinces bought stock over a two month period (each instance of stock purchase is probably a separate charge) utilizing multiple brokerage accounts (putting some in children’s names), passed on illegally-obtained information, laundered his ill-gotten gains, probably lied on his tax return, and generally benefited from criminal activity. Oh, and he faces as much as 20 years in prison on the most serious count, not 20 years on each count. Depending on how he chooses to pursue his defense he will likely get several counts dismissed.

  12. ultimatehitcoach - Nov 30, 2012 at 6:18 AM

    what about the other 500 executives, brokers & their friends & relatives that pull that stuff on a daily basis? anybody going after them? feds love busting celebrity types whenever they get the chance.. & pile on whenever they can. most political hay for the least amount of effort.

    is this just the greatest cuntry in the whole wide world? you betcha

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