One of the remarkable cultural developments since the collapse of Enron Corporation has been the branding of the “Enron” name to become synonomous with all forms of corporate corruption. Earlier this week, the prosecution’s use of the Enron brand in the corporate-fraud trial of former HealthSouth CEO Richard M. Scrushy got the prosecution in some very hot water with the judge in that case.
The fireworks came after the witness — HealthSouth’s security chief and a key defense witness — had mentioned Enron during cross-examination. The prosecutor then then asked the witness if he was referring to “the same company that defrauded investors and laid off many employees, resulting in prison sentences for some people.” That prompted U.S. District Judge Karon O. Bowdre (pictured above) — who previously had warned lawyers in the trial to refrain from references to Enron or any other corporate frauds — to pound her gavel and yell the prosecutor’s name.
After slamming her gavel, Judge Bowdre instructed the jury that the prosecutor had asked a “series of inappropriate questions.” The judge then advised the jury that she was terminating the cross-examination “as a sanction” to the prosecution. No word yet on whether the prosecutor faces further sanctions for what is a serious and intentional breach of the judge’s previous order.
Professor Ribstein has a typically adept observation about this latest incident of prosecutorial misconduct:

“If the government actually has to try the facts of each individual corporate fraud case, it could get sticky.”