Jim Mazzo, a Chapman Board of Trustees member who has been on trial twice for insider trading charges, has reached a potential settlement for his civil charges with the Securities and Exchange Commission. The commission ordered Mazzo to pay a $1.5 million fee, according to documents provided to The Panther.
Insider trading is the illegal use of information that is available only to insiders of a company, shared with outside investors in order to make a profit in financial trading.
While settling out of court isn’t an admission of guilt, Mazzo will waive the right to a jury trial for these charges and be prohibited from making any public statements denying the allegations if he settles.
He will also be barred from serving as an officer or director for any public company, which is what his career has mostly comprised of, according to the documents. Mazzo is not yet retired.
“Mr. Mazzo’s life has been turned upside down for the past decade,” according to the documents. “The stress of these proceedings has been enormous and unimaginable on Mr. Mazzo and his family.”
Mazzo has been tried twice at the Ronald Reagan Federal Building and Courthouse in Santa Ana for insider trading charges, once in March 2017 and again in January 2018 – both of which ended with the jury unable to reach a unanimous verdict. In the first trial, the jury was split 8-4, with the majority of jurors in favor of convicting Mazzo, while the most recent trial ended with 10-2 in favor of acquitting the former CEO.
The documents also allege that Mazzo has lost “significant income” as a result of resignation from several boards over the past four years. As of Dec. 2, Mazzo remains on Chapman’s Board of Trustees.
Jim Doti, Chapman’s president emeritus, testified in Mazzo’s defense during the January trial, saying that Mazzo has handled confidential information with integrity.
In the January trial, prosecutors also added a charge of lying in court regarding Mazzo’s testimony during the first trial, according to an indictment for the second trial.
The indictment asserts that Mazzo knowingly gave false testimony on multiple occasions in late April 2017 when questioned about providing nonpublic information on his medical device company to a friend, former Angels player Doug DeCinces.
A hearing is set for Dec. 4 at the Ronald Reagan Federal Building in Santa Ana, at which a federal judge will decide whether to approve the $1.5 million payment in lieu of a third trial.