In late May, Eric Waxman retired as a partner with Skadden, Arps, Slate, Meagher & Flom in Los Angeles — shortly after making what he described as “deeply” regrettable corrections to earlier statements he had made in an insider trading case.

In the case, Skadden was the transactional counsel to Advanced Medical Optics in its $1.36 billion acquisition by Abbott Laboratories in 2009, and later started representing its then-CEO James V. Mazzo who faces criminal charges of leaking information about the merger.

Now, prosecutors are alleging Waxman made “serial” misstatements in order to collect millions of dollars in legal fees and conceal evidence: For years, Waxman refused to give prosecutors potential evidence related to an interview he claimed was conducted at Mazzo’s behest and therefore protected by the work product rule. But earlier this year, Waxman reversed himself, and admitted the interview was also conducted at the behest of his other client AMO and not protected.

Prosecutors say Skadden should be disqualified from representing Mazzo — who is awaiting criminal trial — as a result of what they describe as conflicts arising from Waxman’s dual representation and misconduct. While Waxman’s former partners insist that his mistakes were unintentional,they’re also distancing themselves from him and his conduct as they dispute prosecutors’ arguments. The imbroglio illustrates one problem that can arise when a law firm represents a corporation and an executive in the same matter.

“Skadden has already accepted the harm to its reputation caused by Mr. Waxman’s mistakes before the Court,” Richard Marmaro, Mazzo’s lead lawyer at the firm, wrote in a motion opposing disqualification . “And, indeed, the attorney who made or caused to be made the mistakes at issue (Mr. Waxman) no longer works at the firm and has withdrawn from this case.”

Waxman, 57, declined to comment through his attorney Brad Brian, of Munger Tolles & Olson. He had worked at Skadden for decades before retiring.

[caption id="attachment_3125" align="alignleft” width="319"][Image “” (src=]Photo of Eddie Murray by Chris Evans (Flickr/Creative Commons)[/caption]

The case has drawn national attention, in part, because it involves former major league baseball players who were teammates on the Baltimore Orioles, Eddie Murray and Doug DeCinces, both of whom have reached monetary settlements with the Securities and Exchange Commission  on parallel civil insider trading charges.

According to prosecutors’ indictment, Mazzo was CEO of AMO when Abbott Laboratories announced in January 2009 that it would pay $22 cash for each share of AMO’s stock. The price represented a 134 percent premium above AMO’s $8 per share trading price.

The indictment alleges Mazzo leaked details about the impending purchase to DeCinces, who in turn leaked to Murray and four others. Mazzo is not accused of making illegal trades, but the others are alleged to have made more than one million dollars trading on the information.

Not long after the deal was announced, the New York Stock Exchange opened an investigation and sent AMO a list of individuals who made potentially suspicious stock purchases.

Skadden was AMO’s corporate transactional counsel at the time, and Waxman interviewed its then-CEO Mazzo, who disclosed he was friends with DeCinces, one of the individuals on the NYSE list, according to prosecutors. Waxman also interviewed DeCinces.

Meanwhile, Skadden also began representing Mazzo — in addition to AMO — in anticipation of insider trading investigations. Exactly when this happened is in dispute: Skadden attorneys claim its representation commenced in February 2009 but prosecutors allege Skadden started representing Mazzo in July 2009.

In 2011, prosecutors served Waxman with a grand jury subpoena to testify about what DeCinces had told him.

But in letters and court documents, Waxman claimed his interview of DeCinces was conducted for Mazzo, and was therefore protected under the work product rule. He also claimed AMO never asked him to interview anyone for the NYSE inquiry. Based on Waxman’s statements, and also a sworn declaration from Mazzo, the court quashed the subpoena for him to appear and testify to the grand jury.

In December 2014, however, in a parallel civil proceeding filed by the Securities and Exchange Commission, AMO’s general counsel filed a declaration indicating that in early 2009, Waxman had summarized both the DeCinces and Mazzo interview to her in separate conversations – meaning any work product protection likely would be waived.

A spokesman for Abbott did not provide comment for this article.

Afterward, prosecutors told Waxman they would send a subpoena for him to testify at Mazzo’s criminal trial – at which his then partner at Skadden, Richard Marmaro, would be Mazzo’s lead trial counsel. Waxman allegedly declined to accept service by email, writing, “It’s a day late and a dollar short.”

By April, he had changed his stance and submitted a list of a dozen corrections to earlier statements he made or caused his partners to make under oath: He corrected earlier statements that AMO never asked him to interview DeCinces or anyone else in connection with the NYSE inquiry, and that there were no written notes of the interview. By that point, Skadden had sent Waxman’s memos from his interview of DeCinces to prosecutors.

Prosecutors wrote that Waxman made intentional misrepresentations in order to conceal evidence – including what he learned while interviewing DeCinces in 2009 – from them. Further, they cited public records that indicated the firm billed at least $6.3 million between 2011 and 2013 creating “a substantial financial interest” to continue representing Mazzo despite what prosecutors described as a conflict of interest.

“The adverse impact of Skadden’s misconduct is hard to overstate,” prosecutors wrote in their motion seeking to disqualify the firm. (To read the motion on Bloomberg Law, click here .)

If convicted, Mazzo could appeal on the grounds that Skadden had a conflict, prosecutors wrote.

A statement issued by Marmaro called prosecutors arguments “replete with false accusations and innuendo.”

He also described the DeCinces interview as “exculpatory” for Mazzo. Although Waxman never obtained a client conflict waiver from either Mazzo or AMO to represent them both, he perceived no conflict, according to documents filed by Marmaro, who wrote that both clients have waived any potential conflict.

Gibson Dunn & Crutcher’s Debra Wong Yang also filed a declaration in June, stating she was retained by Mazzo to advise him about potential conflicts that could arise for Skadden, and he informed her that he still wished to keep Skadden as his counsel.

“It is the government that now seeks the ‘tactical advantage’ of removing Mr. Mazzo’s long-time counsel of choice, even though neither Mr. Mazzo nor AMO —  the real parties in interest here —ever has asserted a conflict or a request for disqualification,” Marmaro wrote in court papers opposing his firm’s disqualification.

U.S. District Judge Andrew Guilford is scheduled to hold a hearing on the matter later this month.