An ongoing insider trading investigation by U.S. prosecutors in Los Angeles is focusing on a retired, well-known baseball player and several other former athletes whose names have not yet been disclosed, said two people familiar with the situation.
The former athletes under scrutiny - mainly a group of professional baseball players - are allegedly part of what one U.S. investigatory government official described as “a loose federation of people” sharing important market-moving information about various companies before it becomes public.
A potential sign of things to come in California came last August when the Philadelphia office charged former California Angels third baseman Doug DeCinces with insider trading. In that case, filed in federal court in Santa Ana, California, regulators charged DeCinces, his physical therapist and two of his friends with trading shares of Advanced Medical Optics, a healthcare company, based on non-public information.
The four men settled with the SEC and agreed to fines. DeCinces paid $2.5 million. A criminal probe remains open, but no charges have been filed so far against any of the men. DeCinces’ lawyer did not respond to a request for comment.
The civil charges against DeCinces are not directly related to the investigation involving the larger group of former athletes. But the people familiar with the situation said the DeCinces charges developed during the investigation.