Wednesday, July 6, 2005

SEC Plans to Push Ahead Against Scrushy

An AP story (here) states that the SEC plans to file papers in connection with a hearing on July 7 before U.S. District Judge Inge Johnson that it wants to move forward with the civil fraud case against former (and future?) HealthSouth CEO Richard Scrushy.  The Commission filed its case back in March 2003 (complaint here) alleging violations of the antifraud, reporting, and books-and-records provisions of the federal securities laws and related rules, including allegations that Scrushy aided and abetted violations by HealthSouth's various CFOs.  The SEC seeks a permanent injunction, civil penalties, and a director-and-officer bar against Scrushy.  The story quotes one of Scrushy's attorneys stating, ""We'll challenge everything . . . Mr. Scrushy doesn't believe he's done anything [wrong]."  It sure sounds like this one will be Round Two of the Battle of Birmingham because the SEC is unlikely to back down from the challenge of a CEO whose company had every CFO in its history plead guilty to conspiracy to commit securities fraud and related charges. (ph)

Civil Enforcement, Fraud, HealthSouth, Securities | Permalink

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