2nd insider trading trial paints defendant as betrayed

SANTA ANA — A top white-collar crime attorney defending a corporate executive in his second insider trading trial on Wednesday worked to portray his client as a victim of an opportunistic ex-friend who’s lying to secure a deal from prosecutors.

In an hourlong opening statement, Richard Marmaro of Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates said Doug DeCinces, the retired Major League Baseball player facing prison after a jury convicted him of insider trading last year, initially bought stock at the advice of investment guru Richard “Dick” Pickup. DeCinces then exploited his friendship with Marmaro’s client, James Mazzo, by “reading” Mazzo’s behavior for clues about activity at Mazzo’s company Advanced Medical Optics so he could buy more stock, Marmaro said.

“You will hear what Mr. DeCinces told his friends about AMO at that time, and the one name you will hear constantly is Dick Pickup,” Marmaro told the jury. “A name you will not hear is James Mazzo. James Mazzo did not become part of Mr. DeCinces’ narrative until the prosecutors offered him a deal.”

DeCinces’ cooperation presented a new challenge in an already complex defense that’s been more than seven years in the making. A jury last May convicted DeCinces and codefendant David L. Parker but hung 8-4 in favor of convicting Mazzo.

Marmaro, a top trial lawyer who’s represented corporate executives since the early 1980s, was preparing for an October retrial when the U.S. attorney’s office secured a superseding grand jury indictment against Mazzo in September based on statements from DeCinces.

The new indictment reduced Mazzo’s charges while strengthening the case: DeCinces’ testimony eliminates much of the circumstantial evidence prosecutors relied on in the first trial. It reduced Mazzo’s tender offer fraud and securities fraud charges from 26 to 16 while adding four counts of perjury based on his testimony in the first trial. Assistant U.S. attorney Ivy A. Wang was part of the first trial team, and Lawrence E. Kole assisted, but only assistant U.S. attorneys Stephen A. Cazares and Jennifer L. Waier are handling witnesses this time. Marmaro is joined by Clifford M. Sloan, Matthew E. Sloan, Kevin D. Lloyd, Michael A. McIntosh and Brendan B. Gants.

Marmaro’s opening statement followed a 55-minute opening statement from Cazares in which he previewed DeCinces’ testimony and detailed his interactions with Mazzo in the months before Abbot bought Advanced. He said DeCinces first bought AMO stock based on advice from Pickup, but he continued buying stock because of tips from Mazzo about the Abbot acquisition. Mazzo told DeCinces, “I’m comfortable with my position” but Mazzo urged him to buy more stock, calling it a “once-in-a-lifetime opportunity.”

Cazares went through a slideshow that detailed significant dates in the months before the acquisition, including an Anaheim Ducks hockey game Mazzo and DeCinces attended together. He described stock purchases made by DeCinces’ friends, including Hall of Fame baseball player Eddie Murray and attorney F. Scott Jackson, founding partner at Jackson Tidus ALC in Irvine. Cazares told jurors DeCinces will testify that Mazzo angrily went to his home after the New York Stock Exchange began investigating the purchases and told him not to tell anybody that Mazzo disclosed insider information, not even his attorneys. He then did as he was told in his meeting with Advanced Medical Optics’ lawyers.

“He was protecting Mazzo, doing as Mazzo warned and directed,” Cazares said.

Marmaro showed jurors DeCinces’ cooperation agreement with the U.S. attorney’s office, including drafts and correspondence that showed how his potential prison time dwindled as his cooperation continued. He went from facing five years in prison to potentially zero time in prison, all dependent on him incriminating Mazzo, Marmaro said. He previewed his client’s testimony and told jurors that the case “really is about the credibility of two men: James Mazzo and Doug DeCinces.”

“He will tell you that Doug DeCinces’ new version is a flat-out, absolute lie,” Marmaro said.

The first prosecution witness is scheduled to testify today at 1:30 p.m. Judge Andrew J. Guilford is presiding.