Tuesday, July 05, 2005
Jury still out on "I didn't know" defense
Perhaps the biggest surprise in Richard Scrushy's acquittal last week in the $2.7 billion accounting fraud at HealthSouth was that the jury believed his "I didn't know even though I was the CEO" defense.
Just months ago, it seemed executives could no longer plead ignorance and get away with it, a view that came after former WorldCom Chief Executive Bernard Ebbers tried that tactic but was still convicted of being part of a conspiracy that cooked his company's books.
Scrushy's verdict seems to reopen the possibility that executives can argue they didn't know about massive wrongdoing even though they were at the helm. That's something the public may find hard to believe, but at least in this case, the jury accepted it.
The profiles of Ebbers and Scrushy are remarkably similar. They have humble roots, became corporate superstars, then had their reputations tarnished by allegations of financial fraud at the companies they built.
posted by Brian Moran @ 8:26 AM