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June 29, 2005
Best Evidence
I've been mildly following the Scrushy trial, since it's the first prosecution under Sarbanes-Oxley. I was a little surprised by the not-guilty verdict yesterday, as everything I'd read seemed to indicate the prosecutors had mountains of evidence. I've seen all kinds of explainations this morning for the verdict....everything from race to hometown advantage to the juror boredom factor. The latter is certainly a problem in any trial of this type. Testimony of financial experts about tons of documents isn't terribly exciting to anyone after a few days.
But the key to verdict, I think, is this:
Prosecutors were unable to provide any direct evidence linking Mr. Scrushy to the fraud. "One of the lessons to draw from cases like this is that corroboration in the form of documents, e-mails, tape recordings, is essential to the government's case," said Jason Brown, a former federal prosecutor now at Holland & Knight.
Like duh. You've a well-known, well-liked defendant on trial in his hometown, whose defense was his subordinates concealed their fraud from him, and you've little or no direct evidence disproving his claim? And you think you'll get a conviction? Not in the real world.
Now arguably, a CEO is responsible for knowing what is going on in his or her company. That's why he gets paid the big bucks. But the average juror also knows that fraud can be concealed from those who are supposed to know. Add to that mix a sympathetic defendant, no direct evidence of his wrongdoing, and the result is a case that's virtually unwinnable.
We in the legal profession have a fancy name for cases like that.
A 'real dog'.
Posted by Rita at June 29, 2005 03:34 AM