SEC to pursue insider trading case despite DOJ dismissal

SANTA ANA -- Securities Exchange Commission attorneys confirmed Monday they're pursuing a civil case against an Orange County businessman accused of insider trading, despite the U.S. Department of Justice abandoning his criminal conviction after a co-defendant exonerated him.

David L. Parker's lawyer, Idaho sole practitioner George B. Brunt, plans to file a summary judgment motion based on the government's conflicting position in the now-dismissed criminal case.

"The government should be estopped from asserting in that case and advocating in that case that Mr. Parker is innocent, and in this case proceeding against him," Brunt said at a status conference Monday before U.S. District Judge David O. Carter.

After telling the attorneys, "You need to litigate this before I die," Carter lamented that the cases aren't with the same judge. While Carter was assigned the SEC civil case in 2012, U.S. District Judge Andrew J. Guilford was assigned the criminal case.

Carter stayed the civil case pending the outcome of the criminal case, and he said Monday he'll cite the situation "as a good example of why the same judge should have the civil and criminal."

"I tried to get that case down here, and that didn't work. But Andy didn't want this case, so that didn't work. So you found yourself in two different places," Carter said.

Guilford presided over a two-month trial in 2017 in which a jury convicted Parker and his officemate, retired professional baseball player Doug DeCinces, but hung on charges against the alleged tipster, ophthalmology executive James Mazzo.

DeCinces testified against Mazzo at a second trial in 2018, but jurors again couldn't reach a verdict. Federal prosecutors then pursued what they described as a "global settlement," which called for Mazzo's criminal indictment to be dismissed after he accepted a no-fault, $1.5 million settlement in his SEC case.

Carter refused to approve the SEC settlement until the criminal case was resolved, triggering a dramatic evening of courtroom wrangling that included an impromptu hearing before Guilford, ordered by Carter.

With Mazzo's cases fully resolved, Assistant U.S. Attorney Jennifer L. Waier moved to dismiss Parker's criminal indictment, which Guilford approved April 15. United States v. DeCinces et al., 12-CR00269 (C.D. Cal., filed Nov. 28, 2012).

The U.S. attorney's office did not explain the dismissal beyond citing the interest of justice, but prosecutors acknowledged after the second trial that DeCinces said he never told Parker he had inside information about a looming sale when he urged him to buy stock in Advanced Medical Optics. Abbott Laboratories acquired Advanced, of which Mazzo was CEO, in January 2009. DeCinces made about $1.3 million, while Parker, who now lives in Utah, made about $350,000.

SEC attorney Christopher R. Kelly said Monday that DeCinces is a witness in Parker's civil case but will invoke his Fifth Amendment right against self incrimination until after his sentencing, which is scheduled for Aug. 12. Parker is ready to testify now, said Kelly, who appeared with SEC attorney Jennifer C. Barry.

Carter is to consider the yet-to-be-filed summary judgment motion on Nov. 4. Trial is scheduled Dec. 3. Securities and Exchange Commission v. Mazzo et al., 12-CV01327 (C.D. Cal., filed Aug. 17, 2012).