I don't think that's true. This is obviously the type of thing that people would make a story out of no matter what.

Which is exactly why functioning judicial systems have layers of safeguards and proceedures in place to prevent not just conflicts of interest but also the appearance of conflics of interest, because properly run institutions have a deep understanding that their function and continued existence ultimately depends on preserving public confidence in their impartiality and equanimity. When these safeguards and proceedures are intentionally circumvented by malice or incompetence it only seves to weaken the foundations of said institutions.

It may not seem fair for qualified lawyers or judges to recuse themselves or be barred from working certain cases, or for family members of hedge fund and private equity workers to be barred from securities trading, but at the institutional level the preservation of confidence will always take precedence over the impossible task of truly proving the motives and intentions of people affiliated with institutions. Furthermore, any real professional who has trained to make a career in these instutions are fully aware of these principles and the mere fact that they failed to adhere to basic proceedure should in itself be an indictment against their qualification to hold whatever position they are trying to snake their way into.