An individual settled SEC charges for trading on material, nonpublic information concerning an oncoming tender offering.
According to the SEC's complaint filed in the U.S. District Court for the Central District of California, the individual, David L. Parker, received a tip regarding an upcoming tender offer for Advanced Medical Optics, Inc. ("Advanced Medical Optics") by Abbott Laboratories, Inc. The SEC alleged that the former CEO of Advanced Medical Optics had initially given the information to his friend, former professional baseball player Douglas V. DeCinces, who then tipped Mr. Parker and four others. All of the individuals traded on the material, nonpublic information before the tender offer was publicly announced. In particular, Mr. Parker bought 25,000 shares of Advanced Medical Optics stock before the public announcement and made approximately $347,920 in illicit profit.
The Final Judgment (i) permanently enjoins Mr. Parker from violating SEA Sections 10(b) and 14(e) and Rules 10b-5 and 14e-3 and (ii) orders him to pay $343,954 in disgorgement and a civil penalty of $56,046.
The SEC originally brought charges for the alleged insider trading in this case in 2011 and 2012 and previously settled with the former CEO, as well as with Mr. DeCinces and the other individuals (see here and here).
Commentary
The settlement is the end of a long strange ordeal for Mr. Parker. The SEC case was filed in August 2012 and was followed by criminal charges later that year. The trial in the criminal case didn't take place until 2017, when a jury found Mr. Parker and Mr. DeCinces guilty of insider trading after a month-long trial, but hung regarding the charges against the former CEO. The former CEO was retried in 2018 but the trial resulted in another mistrial after the jury again couldn't reach a verdict. In the second trial, Mr. DeCinces - who was then cooperating with the government and testifying against the former CEO - denied that he had tipped Mr. Parker. After the former CEO reached a settlement with the SEC in 2019, the government moved to dismiss the case against him and the case against Mr. Parker in its entirety. The court dismissed the case against Mr. Parker with prejudice in April 2019. Despite the criminal authorities' decision to dismiss the charges, the SEC continued with its civil litigation against Mr. Parker, who was the last remaining defendant, which led to the current settlement.
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