Prosecutors move to dismiss insider trading conviction

SANTA ANA -- Federal prosecutors want to vacate the insider trading convictions of an Orange County businessman exonerated through his former co-defendant's cross examination.

A new motion to dismiss the indictment against David L. Parker comes more than a year after retired professional baseball player Doug DeCinces told a jury Parker didn't know DeCinces had propriety information about a looming company sale when DeCinces recommended Parker buy stock in Advanced Medical Optics in late 2008.

It's a final victory for longtime trial lawyer Richard Marmaro, who retired from Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates on Dec. 31 after his near 10-year defense of ophthalmology executive James Mazzo ended with the U.S. attorney's office dismissing Mazzo's indictment.

Parker always maintained his innocence, but Marmaro's cross examination of DeCinces as the prosecution's star witness in Mazzo's second trial elicited supporting testimony that caught prosecutors' attention. While DeCinces testified that Mazzo told him propriety information about the January 2009 sale of his company, Advanced Medical Optics, to Abbott Laboratories, he told Marmaro he never provided Parker inside information or revealed the source of his tips when he recommended Parker buy Advanced stock.

Parker's lawyer, sole practitioner George B. Brunt, told U.S. District Judge Andrew J. Guilford at a post-trial hearing in March 2018 prosecutors should immediately dismiss Parker's charges and Guilford should vacate his convictions.

"If the government truly believes that Doug DeCinces was telling the truth about Mr. Parker as they advocated, I don't think there's any reason for Mr. Parker and his family to endure another day with this," Brunt said at the time.

Assistant U.S. Attorney Stephen A. Cazares, who's now with Davis Wright Tremaine LLP, told Guilford prosecutors "recognize the issue." Cazares said a month later Guilford "probably has" the authority to order prosecutors to address Parker's case "within a few months."

Prosecutors have not said why it took nearly a year to bring the motion. Thom Mrozek, spokesman for the U.S. attorney's office, declined comment on Friday.

Brunt, who's based in Idaho Falls, Idaho, also could not be reached for comment Friday.

Cazares prosecuted the case with Assistant U.S. Attorney Jennifer L. Waier, who filed the motion to dismiss Thursday. It's signed by Lawrence S. Middleton, chief of the U.S. attorney's office's criminal division for the Central District of California. At three sentences, it provides no explanation for the sought dismissal beyond Rule 48(a) of the Federal Rules of Criminal Procedure, which allows prosecutors to "with leave of court, dismiss an indictment, information or complaint."

"Accordingly, the government moves to dismiss the case against defendant," the motion states. United States v. DeCinces et al., 12CR-00269 (C.D. Cal., filed Nov. 28, 2012).

Parker made $350,000 by selling his stock shortly after Abbott Laboratories acquired Advanced in January 2009 then was convicted of three counts of tender offer fraud in May 2017 after a two-month trial.

DeCinces, Parker's longtime friend and officemate, also was convicted of 14 counts of tender offer fraud, but jurors hung 8-4 in favor of convicting Mazzo, DeCinces' former friend and neighbor. The second jury hung 10-2 in favor of acquitting Mazzo on 19 of 20 charges then 9-3 on a broader perjury charge related to his testimony in the first trial.

DeCinces' sentencing had been awaiting the outcome of Mazzo's criminal case, which was dismissed in December. Mazzo also agreed to a $1.5 million, no-fault settlement in a Securities Exchange Commission civil case.

No hearing has been scheduled for the dismissal motion regarding Parker, which will be considered by Guilford. DeCinces' sentencing also has not been scheduled.