Securities Law Daily provides daily coverage of developments in the regulation of federal, state, and international securities and futures trading, with objective coverage of the...
By Phyllis Diamond
Dec. 22 — Former professional baseball player Douglas DeCinces and the former eye-care executive who allegedly tipped him to inside merger information can't bar prosecutors from introducing evidence they traded tips about other mergers that weren't charged in the indictment, the U.S. Court of Appeals for the Ninth Circuit ruled Dec. 22 (United States v. DeCinces, 2015 BL 420600, 9th Cir., No. 15-50033, 12/22/15).
It said that while the allegations constituted “other acts” evidence within the meaning of Fed.R.Evid. 404(b), it was nonetheless admissible to show knowledge and intent with respect to the charged insider-trading violations.
Judge Johnnie B. Rawlinson also rejected for lack of jurisdiction a cross-appeal by DeCinces' co-defendant James Mazzo, who claimed the indictment should have been dismissed on double jeopardy grounds. Judge Paul J. Watford concurred in that decision.
Mazzo, DeCinces and several of DeCinces' associates were indicted beginning in 2012 over their alleged roles in an insider trading scheme involving the 2009 acquisition of a medical device company by Abbott Laboratories Inc. ((187 Securities Law Daily, 9/26/14)(230 Securities Law Daily, 11/30/12).
In the insider trading prosecution, the government appealed a pretrial order excluding evidence that Mazzo tipped DeCinces to two other prospective merger transactions that weren't charged in the indictment. Reversing, the appeals court said that evidence is material and tends to prove a common scheme and the lack of mistake or coincidence.
On cross-appeal, Mazzo argued that he presented a viable double-jeopardy claim subject to immediate review. However, the appeals court said the Double Jeopardy Clause doesn't bar the government from prosecuting a defendant for multiple offenses in a single prosecution.
Mazzo was represented by Skadden, Arps, Slate, Meagher & Flom LLP. Manatt, Phelps & Phillips LLP represented DeCinces.
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