Supreme Court clears attorney Mackey in discipline case involving fraudster’s ex-wife

The Indiana Supreme Court has cleared a well-known attorney and former federal prosecutor of misconduct charges stemming from a nearly decade-old matter. The court found Thursday “that the allegations of misconduct were not proven” in a one-page judgment in favor of Barnes & Thornburg partner Larry Mackey.

Mackey

The order concluded a more than year-long disciplinary case involving Mackey’s relationship with the ex-wife of a former client, Fishers hedge fund executive Keenan Hauke of Samex Capital Partners. Hauke committed securities fraud by masking investment losses at Samex, where 67 investors lost more than $7 million.

Mackey began representing Hauke nearly 10 years ago, and Hauke pleaded guilty in December 2011 to securities fraud and was sentenced to 10 years in federal prison. 

Mackey “did not engage in misconduct,” the Supreme Court found.

Mackey and Keenan’s then-wife Sarah Hauke began a relationship that eventually became romantic, and the two eventually wed after she and Keenan Hauke divorced. But the Supreme Court Disciplinary Commission took years to bring a case against Mackey, a partner in Indianapolis’ largest law firm who made a name for himself prosecuting major federal cases including the 1995 Oklahoma City bombing.

The commission accused Mackey of violating two rules of professional conduct: Rule 1.7(a)(2) for representing a client when there is a significant risk the representation may be materially limited by the attorney’s own self-interest, and Rule 8.1(a), knowingly making a false statement of material fact to the commission.

But, in October, hearing officer Robert Reiling wrote in his recommendation to the court that the case against Mackey lacked merit. “This matter should be dismissed and no action should be taken” against Mackey, concluded Reiling, a name partner of the Lafayette firm Reiling Teder & Schrier.

Keenan Hauke had asked the commission for an investigation of alleged misconduct by Mackey multiple times. Hauke went public with his accusations against Mackey in 2017, after filing a petition with the court alleging he had received ineffective assistance of counsel during his securities fraud case. At that time, Mackey and Sarah insisted their relationship did not commence until after Mackey no longer represented Hauke.

But the disciplinary commission said that wasn’t so, stating that in its initial investigation of Hauke’s claims against Mackey, the attorney “downplayed the romantic nature of his interactions with Sarah and stated he and Sarah became friends” during his representation of Hauke. Hauke accused Mackey of having an affair with his ex-wife, a charge Mackey denied.

Mackey insisted that he and Sarah did not have a sexual relationship during his representation of Hauke. Reiling said the commission had not proven its case that Mackey failed to be candid with the commission by failing to call the relationship “romantic,” or that Mackey had a conflict of interest.

“There is no Indiana case imposing discipline for a personal, non-sexual relationship with a client’s spouse in a context where the client and his estranged spouse’s interests are aligned rather than adverse. Making new law where no precedent exists is inappropriate—especially with an inherently subjective rule like Rule 1.7(a)(2)” regarding conflict of interest, Reiling wrote in his report.

Further, “At the time (Sarah) and (Mackey) recognized their mutual interest in each other, (Hauke’s) legal representation was relatively inactive and close to conclusion. On the federal criminal side, (Hauke) had already given the July 6 proffer to federal authorities, and (Mackey) already had made clear the need to transition to new counsel based on (Hauke’s) inability to pay fees.”

Reiling noted that Hauke filed two prior disciplinary complaints against Mackey in November 2013 and September 2018 that were dismissed before the commission reopened its case in December 2019 after receiving a referral letter from Southern Indiana District Court Chief Judge Jane Magnus-Stinson based on evidence Hauke raised in court.

Hauke testified at Mackey’s disciplinary hearing, but Reiling noted Hauke “was not a credible witness due to his felony conviction and inconsistent testimony” and “… made several accusations against (Mackey) that were untrue and/or unsubstantiated.”

In its order concluding the case Thursday, the Supreme Court agreed.

“The Court incorporates by reference the hearing officer’s findings of fact. The hearing officer concluded the Commission failed to meet its burden of proving that Respondent committed any professional misconduct. After reviewing the evidence and considering the parties’ arguments, the Court concludes that the hearing officer’s findings of fact are supported by the evidence, and based on those findings we likewise conclude that the Commission has failed to prove by clear and convincing evidence either of the two charged rule violations.”

The decision was unanimous except for Justice Mark Massa, who did not participate.

Keenan Hauke separately filed a pro se lawsuit in Marion Superior Court alleging attorney misconduct against Mackey and “lack of appropriate oversight” by Barnes & Thornburg. That case was dismissed in July.

Attorney Wayne Turner of Hoover Hull Turner represented Mackey in his discipline case and issued a statement Friday on his behalf in response to a request for comment.

“Mr. Mackey is grateful for the careful and deliberate review of the evidence by the Indiana Supreme Court which confirmed the hearing officer’s conclusions that he acted properly—both in his representation of Mr. Hauke nearly a decade ago, and in the information he provided in response to requests from the Disciplinary Commission,” the statement said. “A disciplinary complaint takes a significant toll on a lawyer and impacts his reputation even when it is ultimately found to be without merit. Mr. Mackey is grateful to have been vindicated and to have this matter behind him.”

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.

6 thoughts on “Supreme Court clears attorney Mackey in discipline case involving fraudster’s ex-wife

    1. So a commenter on a news article is the “snake” here? Gosh, thanks for this lawyerly perspective. Freud surely would approve of your word selection.

  1. I don’t know the facts of Mr. Mackey’s case, so I wouldn’t offer an opinion on it.

    I would like to offer an opinion on G. Douglas A’s comment though. His instincts regarding big firm attorney discipline is not without foundation. I remember doing a several year study of disciplinary cases and finding that close to 99% of the disciplinary cases involved smaller firm attorneys and sole practitioners. (I used the IBJ’s list of large law firms as my guide.)

    My experience is that te politically connected, large firm attorneys seemed to get away with a lot of things that a small firm attorney or sole practitioner would not dare try. Of those law firm attorneys pushing the ethical envelope, it seemed to me that the worst by far were some of the attorneys at Barnes & Thornburg. Even attorneys from the other big firms, such as then Ice Miller and then Baker & Daniels complained to me about B&T, particularly with regard to strictly not adhering to conflicts of interest rules. One of the most flagrant example is when B&T represented the State of Indiana against IBM in the Medicaid privatization fiasco, while also representing one of IBM’s major subcontractors, ACS, which should have been a co-defendant in the case. B&T claimed that the conflict had been waived and they had built a “Chinese Wall” at the firm between the attorneys representing both of the clients. First, under the rules it’s a nonwaivable conflict. And second, there is no such thing in the disciplinary rules as erecting a “Chinese Wall” at a law firm to avoid a conflict of interest.

    I am frankly a bit shocked at the Commission pursuing Mackey, a B&T attorney. I can tell you though that most smaller firm attorneys and sole practitioners though would not have had the resources to fight back against the Commission. Faced with the unlimited resources of the Commission, they would have had to settle for some sort of discipline. I remember when the Commission came against me for writing a private email to another attorney criticizing a judge in a probate case, and getting a couple minor facts wrong in the email. (The Commission didn’t start coming after me until months later when I wrote critically about the Commission and its leader on my blog. That is when I reported on the results of my study.) According to the Commission’s filings, it appears it incurred more of an expense going after me, a critic of the Commission, than another case that year in which an attorney was accused of stealing millions from his clients. Priorities?

    All that though is water under the bridge. What the Indiana Supreme Court needs to do NOW is to install new leadership at the Commission, do a thoughtful and thorough study of the disciplinary process, and make long overdue reforms that attorneys have been clamoring for for years. It’s no secret that the attorney disciplinary process in Indiana has been broken for a long, long time.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets in {{ count_down }} days.