SANTA ANA, Calif. (CN) - Former pro baseball player Doug DeCinces was charged Wednesday in a 44-count federal indictment alleging inside trading, securities fraud and money laundering.
DeCinces and three co-defendants are accused of profiting from inside information about a takeover bid for an Orange County-based medical device company.
DeCinces, 60, a third baseman, played Major League baseball for 15 years, with the Orioles, Angels and Cardinals. He is now president and CEO of a real estate development firm in Irvine.
Charged with him were David Parker, 60, of Provo, Utah, a friend and business partner; Fred Scott Jackson, 66, of Newport Beach, a friend and real estate attorney, and Roger Wittenbach, 69, of Lutherville-Timonium, Md., also a friend of DeCinces.
The charges stem from Abbott Laboratories' January 2009 acquisition of Advanced Medical Optics, of Santa Ana, whose stock traded on the New York Stock Exchange under the symbol EYE.
After Abbott's takeover bid was announced, EYE's stock price jumped from $8 to $22 a share, prosecutors said.
According to the indictment, an officer and director of EYE, who was "a close personal friend" of DeCinces, told him in late 2008 that Abbott was going to offer $21 to $23 per share for EYE - nearly three times its price at the time. DeCinces is accused of buying 90,700 shares of EYE stock-in fact, liquidating a diverse stock portfolio to do so-and then selling his EYE shares for $1.3 million in profits after Abbott announced its takeover bid.
DeCinces passed on the inside information to his three co-defendant friends, "in part, to make up for prior investment recommendations from DeCinces 'that had gone bad,'" the U.S. Attorney's Office said in a statement announcing the indictment.
Parker is accused of making $346,920 from the inside trading; Jackson of making $140,259; Wittenbach of making $201,692, and his sister of making $13,214. The sister is not named as a defendant.
DeCinces is charged with 21 counts of inside trading, 21 counts of tender offer (securities) fraud, and one count of money laundering.
Parker and Jackson are each charged with three counts of inside trading and three counts of tender offer fraud; Parker is also charged with money laundering.
Wittenbach is charged with two counts of inside trading and two counts of tender offer fraud.
Securities fraud is punishable by up to 20 years in prison, money laundering by up to 10 years.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.