* Feds probe whether Murray traded on secret merger news
* CEO of target, Advanced Medical Optics, also scrutinized
* Multiple leaks, including from law firm, bank, are
By Emily Flitter
NEW YORK, June 20 Hall of Fame baseball player
Eddie Murray is one of several former professional athletes
under investigation by federal authorities in a U.S. insider
trading case stemming from the buyout of a medical device
company, people familiar with the three-year-old probe said.
Federal prosecutors and securities regulators are trying to
determine whether Murray, a star slugger for the Baltimore
Orioles, traded on inside information that Abbott Laboratories
was about to announce a deal in January 2009 to acquire
Advanced Medical Optics for $2.8 billion, the sources said.
Reuters previously reported on the investigation by federal
prosecutors in Los Angeles and the U.S. Securities and Exchange
Commission, but did not identify any of the players under
Murray, who has not been charged with any wrongdoing, could
not be reached for comment. Michael Proctor, a lawyer who is
representing Murray in the matter, did not immediately respond
to a request for comment.
Diane Hock, a lawyer who represents Murray in his
post-baseball marketing deals, said she had heard about an
investigation, but declined to comment further.
The investigation involving Murray is related to the probe
that led to the filing of a civil insider trading case against
former Orioles player Doug DeCinces. In August 2011, DeCinces
settled with the SEC, agreeing to pay $2.5 million in fines,
while neither admitting nor denying wrongdoing in the trading of
Advanced Medical Optics shares.
DeCinces and Murray played together on the Orioles from 1977
DeCinces' lawyer did not respond to calls seeking comment.
Securities regulators always take note of trading activity
in shares of companies involved in mergers and try to identify
buyers or sellers in the stock who may have acted based on
nonpublic information. Reuters could not ascertain how many, if
any, shares of Advanced Medical Optics Murray bought.
The probe into the possible insider trading by professional
baseball players is a California offshoot of the sprawling
investigation in New York that led to the conviction of Galleon
Management hedge fund founder Raj Rajaratnam and charges against
dozens of traders and corporate consultants. Some legal experts
say the California phase of the investigation is an indication
of just how commonplace the sharing of corporate secrets has
Investigators have found that leaks about the Advanced
Medical Optics deal may have come from a number of places,
including people who worked for the medical device company; its
law firm, Skadden Arps; and its merger adviser, Goldman Sachs
Group Inc, according to court records and people familiar
with that matter.
Goldman spokesman Michael DuVally said: "We have been aware
of these allegations for more than two years, investigated them
(and) fully cooperated with federal authorities in the matter."
A spokeswoman for Skadden declined to comment. A top partner
at the firm is also representing one of the suspected leakers,
James V. Mazzo, who was the chief executive officer of Advanced
Medical at the time of the takeover.
Mazzo, now a senior vice president at Abbott's subsidiary,
Abbott Medical Optics, has not been charged with any wrongdoing.
He did not respond to email or phone calls seeking comment. His
lawyer, Richard Marmaro, a partner at Skadden Arps in Los
Angeles, declined to comment. An Abbott spokesman said the
company was not under investigation and declined to comment
Mazzo, 55, graduated from California State University, Long
Beach, with a degree in zoology, and lives in Laguna Beach, a
coastal town south of Los Angeles. He is known for his
philanthropy and volunteerism. In 2009, for a charitable
auction, he donated tickets worth $3,000 for a group of seats in
an Anaheim Angels dugout suite, according to a program for the
"My first love is baseball," Mazzo told a medical trade
publication in a 2011 interview. "I am a die-hard (Chicago) Cubs
fan, and I played minor league baseball before my days as a
Mazzo is a trustee of the University of California, Irvine
Foundation and sits on the Dean's Advisory Board of its Paul
Merage School of Business. He is also on the board of OCTANe, an
organization that tries to connect local engineers and
technology startups in Orange County with investors and
The SEC's complaint against DeCinces, filed last August,
claimed the former third baseman had gotten information about
the impending takeover from a source who was "directly involved
in the impending (Advanced Medical Optics)/Abbott transaction
from its inception in October 2008."
DeCinces bought shares of Advanced Medical Optics on Dec. 1,
2008, the same day Abbott sent the company a preliminary
After more than 10 years with the Orioles, Murray, a first
baseman, headed west to California, where he spent three seasons
playing for the Los Angeles Dodgers. Next, he went to the New
York Mets, then to the Cleveland Indians and briefly to the
Angels, which were renamed the Anaheim Angels the year Murray
played for them and are now called the Los Angeles Angels of
Murray, who hit 504 home runs in his career, is widely
regarded as one of the best switch hitters, who can hit from
either side of the plate.
After he retired, Murray was the first base coach for the
Dodgers. He was elected to the Hall of Fame in 2003.
The baseball players are not the only group under scrutiny
for allegedly trafficking in nonpublic information about the
Advanced Medical Optics buyout, according to sources familiar
with the investigation and court filings. There appear to have
been leaks at many points along the way to the takeover,
according to the sources and the court papers.
Goldman Sachs provided investment banking services in the
buyout of the medical device company. Reuters has reported that
the SEC and federal investigators are looking at whether
Goldman's senior healthcare banker, Matthew Korenberg, passed on
information about the deal to his friend Paul Yook, a healthcare
analyst at Galleon Management.
Korenberg's lawyer, John Hueston, a partner at Irell &
Manella, did not respond to a request for comment. He has
previously told Reuters the investigation was "going nowhere."
DuVally, the Goldman spokesman, said: "Matt Korenberg
remains actively employed by the firm."
Yook could not be reached for comment.
In June 2011, Dean Goetz, a lawyer in Carlsbad, California,
agreed to pay about $23,000 to settle SEC charges that he traded
on secret information after learning about the Advanced Medical
Optics deal by going through his daughter Amy's papers without
her knowledge, according the SEC's complaint.
Amy Goetz, also a lawyer, worked on the deal as an associate
at Skadden. She is no longer with the big law firm and could not
be reached for comment. John Kirby, a lawyer for Dean Goetz, did
not respond to a request for comment.