DeCinces Settles Insider Trading Suit With Feds

Former MLB all-star Doug DeCinces has settled insider trading charges with federal regulators on over $1.7 million in illegal trades.

The Securities and Exchange Commission says DeCinces received an insider tip in late 2008 that the Advanced Medical Optics firm would be acquired by Abbott Laboratories, Incorporated. The SEC asserted DeCinces bought shares of AMO and told three friends- who also traded on the deal.

DeCinces agreed to pay $2.5 million to settle the case without admitting anything and his three friends also settled.

Here's video of DeCinces from a new "Jay Johnstone Show" pilot that looks a lot like the old show Johnstone had...
((HT: mimimarije))

More Lenny Dykstra Evidence Of His Lack Of Scruples

The HQ has chronicled before how we both marveled and, then, laughed at both the bear and bull versions of Lenny Dykstra and his ability to pick stock winners...

Now, more evidence of his inability, silliness, and lack of winnerness is coming forward...

Randall Lane, over at The Daily Beast, has penned a new book that shows that Dykstra snowed even CNBC's Jim Cramer.

Getting $250K from a penny-stock company to pimp their product through his newsletter will do that for you. Dykstra also, apparently, said he would parade more small company CEO's in front of Cramer for them...

For a fee...
Neat...

Here's Jane Wells in Los Angeles at the time Dykstra filed Chapter 11
((HT: CNBC/trustfxtv))


The Lane story is required reading for someone who is, certainly, worthy of an SEC investigation at the first possible moment...

His Boots Are Headed For Prison

((HT: GlobeSports))

A federal judge on Tuesday sentenced Silicon Valley financier William “Boots” Del Biaggio III ((pictured, thanks Nashville Post)) to more than eight years in prison for bilking investors and banks — including one he helped launch — out of millions of dollars in a desperate attempt to buy a pro hockey team.

Boots is to report to prison in January.

Del Biaggio pleaded guilty to one charge of forging financial documents to obtain $110 million in loans from several banks and two NHL owners — Craig Leopold of the Minnesota Wild and Los Angeles Kings owner AEG. Del Biaggio used the money to purchase a controlling interest in the Nashville Predators.

Del Biaggio set his crime in motion by turning to David Cacchione, a financially strapped stockbroker at Merriman Curhan Ford Group Inc. who owed him $2 million. According to federal prosecutors and the SEC, Cacchione e-mailed Del Biaggio account statements from several wealthy Merriman clients showing tens of millions of dollars worth of stock holdings.

Del Biaggio then doctored the account statements by cutting out the clients' names and pasting in his own and presenting them to the banks and NHL owners as collateral. Auditors examining Merriman's books uncovered the fraud last year. Cacchione has pleaded guilty to one fraud charge and is scheduled to be sentenced Sept. 29.

Henry Tang, Merriman's chief financial officer, on Tuesday told U.S. District Court Judge Charles Breyer that the scam cost the San Francisco-based company $10 million in legal fees and forced it reduce its staff from 188 employees to 85. Tang said the publicly traded company's share price has tumbled because of Del Biaggio's action, wiping out $43.4 million in market capitalization.

Breyer ordered Del Biaggio to pay back eight banks and the two NHL owners a combined $47.5 million. One of the victim banks is Heritage Bank of Commerce, which Del Biaggio co-founded with his father nearly 20 years ago. The judge ordered Del Biaggio to pay the bank $4.8 million.

Besides the fraudulent loans, the Securities and Exchange Commission has filed a lawsuit seeking to recover roughly $20 million of individual investments the agency accuses Del Biaggio of spending on personal expenses. Three of those investors on Tuesday urged the judge to mete out a lengthy prison sentence, complaining that Del Biaggio squandered their retirement funds and children's education nest eggs.

Several other victims, including childhood friends and longtime business associates, wrote the court with similar sentiments. Although those losses weren't included in the indictment, Breyer still ordered Del Biaggio to also pay back those victims. In all, Del Biaggio has to repay a total of $67.4 million.

“A betrayal of trust is an awful thing,” Breyer said. “I don't care if you can pay back everything — this will never leave you and that's the real punishment here.”

Breyer said Del Biaggio's cooperation with investigators once his fraud was discovered spared him a longer prison sentence of more than 10 years.

He filed for bankruptcy and many of his assets, including his Nashville Predators stake, will be sold by court order.

On Tuesday, while his weeping parents and friends looked on, Del Biaggio tearfully apologized and vowed to pay back everyone.

“I was blinded by pride and ego,” he said. “Everyone makes mistakes. I will come back from this and I refuse to let this define my life.”

Those of us at OSG HQ would like to remind people that the NHL let this happen as well- by not performing due diligence necessary to make sure someone like Del Biaggio couldn't be an owner...

And that Jim Balsillie could...

SEC Drops Case Against Cuban

((HT: MyFoxDFW))

A federal judge on Friday dismissed a civil insider trading lawsuit against Dallas Mavericks owner Mark Cuban ((pictured, thanks Dallas Morning News file)).

While granting Cuban's motion, U.S. District Judge Sidney A. Fitzwater gave the Securities and Exchange Commission 30 days to file an amended complaint.

Document: Read Full Ruling (PDF)

The SEC alleged Cuban was involved in insider trading when he sold shares in an Internet search engine company, Mamma.com Inc., after receiving confidential information about a private offering in 2004.

The SEC said the billionaire NBA team owner avoided a loss of $750,000 by selling his 600,000 shares, which represented a 6.3 percent stake in the company.

In his 35-page ruling, Fitzwater wrote that the SEC didn't accuse Cuban of promising not to trade based on the confidential information he received. Thus, the commission could not hold him liable for illegal insider trading, the judge wrote.

Fitzwater said the SEC could file a new complaint if it can allege that Cuban promised not to trade on the information.

The judge rejected some of Cuban's claims about his fiduciary relationship with the company, however.

Scott Friestad, associate director of the SEC's Division of Enforcement, said in an e-mail statement that the commission was reviewing the ruling and weighing its options.

Ralph Ferrara, one of Cuban's attorneys, said he needed time to digest the ruling but was initially impressed with what he called Fitzwater's "appellate court level" analysis.

"It sounds like unlike many trial courts on motions to dismiss, he really tried to come to grips with the fundamental legal policy questions that we raised," Ferrara said.

Cuban didn't immediately respond to an e-mail seeking comment.

Five years ago, Mamma.com Chief Executive Guy Faure told Cuban by phone that the company was planning to raise capital in a so-called private placement in a public equity offering known as a PIPE, the SEC lawsuit said.

Faure began the conversation by saying he was about to give confidential information and Cuban agreed to keep it to himself, the SEC said. According to the lawsuit, Cuban became angry because he said PIPEs dilute stock value for existing shareholders, and he ended the call by saying, "Well now I'm screwed. I can't sell."

The SEC alleges that Cuban sold his shares hours after the phone call from Faure.

Fitzwater ruled that Cuban's statement can't "reasonably be understood" as an agreement to sell based on the information.

"Thus while the SEC adequately pleads that Cuban entered into a confidentiality agreement, it does not allege that he agreed, expressly or implicitly, to refrain from trading on or otherwise using for his own benefit the information the CEO was about to share," Fitzwater wrote.

The 50-year-old Cuban is a tech entrepreneur who sold his Broadcast.com to Yahoo Inc. in 1999 at the height of the dot-com boom. He bought the Mavericks in 2000.

Cuban runs a Web site called Sharesleuth.com, which bills itself as providing "independent Web-based reporting aimed at exposing securities fraud and corporate chicanery." A companion site, BailoutSleuth.com, tracks the government's $700 billion financial rescue plan.