A federal judge in Santa Ana ruled on Tuesday that Skadden Arps should not be disqualified from defending a former medical device company executive on criminal insider trading charges, despite suggesting a lawyer in the case committed "perjury.”
In an 11-page ruling, U.S. District Judge Andrew Guilford stopped short of naming who was responsible for perjury, and concluded that regardless of the complex facts at issue, Skadden could remain in the case.
“This Court has long been concerned about false statements under oath,” Guilford wrote, dropping a footnote to a law review article he authored on the subject, “but here the right of a criminal defendant to pick his attorney requires denying the request to disqualify counsel.”
In the case, Skadden lawyers have represented both a corporation, Advanced Medical Optics — which was acquired by Abbott Laboratories in 2009 — and that company’s former CEO James Mazzo, who faces criminal and civil insider trading charges that he leaked inside information about the 2009 merger. Federal prosecutors have argued the dual representation has created potential conflicts and the firm should be disqualified from representing Mazzo.
“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," Guilford ruled.
While Skadden disputes that it has any conflicts, one of its former partners, Eric Waxman, retired this Spring, shortly after admitting he made a series of “deeply regrettable” mistakes about who his client was, and in turn, what evidence needed to be produced to prosecutors.
The judge wrote that he was satisfied that Mazzo understood the potential conflicts that could arise as a result of choosing Skadden as his counsel. In particular, should he proceed to trial, Skadden may not be able to cross-examine employees of Advanced Medical Optics since the company is a client. But Mazzo could use another law firm in those circumstances, Guilford wrote.
Prosecutors accused Waxman of engaging in a pattern of misrepresentations to secure tactical advantage for Mazzo. More specifically, they wrote Waxman made misstatements about when he stopped representing Advanced Medical Optics and when he started representing Mazzo in order to escape having to testify to the grand jury that was investigating insider trading.
Guilford does not downplay the seriousness of Waxman’s misstatements. Immediately after laying out the history of the case, the judge wrote: “The perjury in this case has unnecessarily complicated matters.”
He did not specifically accuse Waxman or anyone at Skadden of perjury, however.
Waxman’s attorney Brad Brian, of Munger Tolles & Olson, declined to comment.
Thom Mrozek, a spokesman for the U.S. Attorney’s Office in the Central District of California, declined to comment.