Judge: Ex-AMO CEO Mazzo can keep lawyers

A federal judge this week denied federal prosecutors’ request to disqualify the law firm representing former Advanced Medical Optics CEO James Mazzo, despite misrepresentations by a former lawyer for Skadden Arps Slate Meagher & Flom.

Mazzo was indicted in September 2014 on insider trading charges stemming from Abbott‘s (NYSE:ABT) $2.8 billion acquisition of AMO in 2009. Prosecutors accused Mazzo of tipping close friend and neighbor Doug DeCinces about the deal. DeCinces, a former baseball player for the Baltimore Orioles, allegedly passed the information on to former teammate Eddie Murray, who agreed to settle his case for $358,000 but admitted no wrongdoing.

Prosecutors later asked Judge Andrew Guilford of the U.S. District Court for Central California to disqualify Skadden, after a document surfaced that former Skadden partner Eric Waxman had testified did not exist. The handwritten notes, from an early-2009 meeting between Waxman and DeCinces, were only brought to light in February, according to court documents. Skadden subsequently withdrew some 39 statements made by Waxman and other Skadden attorneys; Waxman left the firm in May, according to the documents.

Prosecutors also claimed that Skadden should be disqualified because of a conflict of interest caused by its representation of both AMO and Mazzo. Guilford agreed to re-examine the issue, but found that Mazzo’s 6th Amendment right to counsel and the strength of his conflict-of-interest waiver trumped the government’s claims.

“The perjury in this case has unnecessarily complicated matters. With attorney-client relationships between Skadden and AMO and Skadden and Mazzo; a former employment relationship between AMO and Mazzo; and multiple waivers sprinkled over the timeline of events, there are numerous conflicts issues not just concerning Skadden’s defense of Mazzo in this criminal prosecution. Despite the presence of complex conflicts issues that might serve as the basis to disqualify Skadden, none overcomes the strong right of a criminal defendant to pick his counsel,” he wrote.

“The court’s decision is strengthened by Mazzo’s waiver of conflict-free counsel, which is one of the best and most complete waivers the court has ever seen,” the judge added. “Mazzo’s plea to keep his counsel of 6 years, who is intimately familiar with this criminal prosecution, was strong and impressive. … The court is not convinced that any such actual or potential conflicts exist here. The court is impressed by Mazzo’s statements and the waiver presented here. Among other things, Mazzo’s consultation with independent counsel who previously served as a state superior court judge and as the United States Attorney for the Central District of California supports the court’s finding of a voluntary, knowing, and intelligent waiver.”

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