To many legal observers, it looked to be an ideal case for imposing tough criminal sanctions under the Sarbanes-Oxley Act for falsely vouching for financial statements.

But a Birmingham, Ala., jury’s stunning decision to acquit HealthSouth founder Richard Scrushy of all charges translated into a crushing defeat for prosecutors in the high-profile effort to bring a false-certification case under the three-year-old governance and accounting law.

With a wealth of evidence and a parade of guilty pleas from financial executives turning the heat on Mr. Scrushy, the government probably figured “how can we not get a conviction here?” said Steven Smith, a litigator at Bryan Cave LLP in Chicago. “So this is a huge blow to the government.”

The Sarbanes-Oxley count – which carried a potential of 20 years in prison and $5 million in fines – was one of three dozen Scrushy faced, and so the sweeping not-guilty verdict doesn’t necessarily represent an indictment of the Sarbanes provisions themselves or indicate any particular ease or difficulty in proving such charges in future cases. In essence, the entire case flopped. “The charges all kind of blended together,” Mr. Smith said.

“If the jury had reached the decision he [Mr. Scrushy] knew of the fraud, the next logical step is the conclusion that he also filed a false certification,” said Timothy Hoeffner, a partner at Philadelphia law firm Saul Ewing who represents companies, directors and officers in securities litigation. “It’s just another variation on the basic charge the CEO committed fraud.”

For example, litigators said, if such a false certification charge had been part of some of the other high-profile cases where juries returned guilty verdicts – such as in the trial of Bernard Ebbers, the former chairman and CEO of WorldCom, it’s likely the Sarbanes-Oxley charge would have represented just one more guilty count.

Still, “the issue stays alive whether the government can prosecute a CEO or a CFO for knowingly filing a false certification,” said Mr. Hoeffner. “The government made a big assumption that this case was a slam-dunk. It shows that all these cases against CEOs are not slam-dunks.”

At the same time, no one expects the Scrushy case to be the last time out for a Sarbanes-Oxley false-certification charge. But one lesson that outside observers see for prosecutors is the need to reduce the number of charges overall in order to bring the most potent charges into focus.

“They will probably learn they should not bring so many charges and to focus their case,” said Mr. Smith, suggesting they ditch such side-counts as money laundering and wire fraud.

While the Sarbanes-Oxley question was simple – essentially asking whether Scrushy conspired to falsely certify financial statements in violation of the law – jurors were asked to churn through a complicated 37-page verdict form, said Mr. Smith. “Focusing on it in this very long document, I think would be very hard for the jury.”