Ex-HealthSouth exec loses bid to escape ban
Published: Wednesday, Aug. 28, 2013, 8:57 p.m.
A federal judge rejected former HealthSouth Corp. Chief Executive Richard Scrushy's bid to lift a ban on his serving as an officer or director of a public company, which was part of his settlement of the Securities and Exchange Commission charges that he masterminded a $2.6 billion accounting fraud.
Scrushy, 61, who last year finished nearly five years in prison in an unrelated bribery case, has contended that the ban was impeding his ability to return to the healthcare industry, where he built Birmingham, Ala.-based HealthSouth into a large medical rehabilitation company.
However, U.S. District Judge Inge Prytz Johnson in Montgomery, Ala., concluded that Scrushy “benefited greatly from the fraud, whether he knew about it or not,” and that there would be a “great likelihood” of misconduct if the ban were lifted.
“While the court has every confidence in Scrushy that he can once again create an empire out of nothing, the court also remains convinced that the temptation of personal enrichment is too much for him to bear,” she wrote in a decision on Tuesday.
The judge added that the ban does not prevent Scrushy from starting a new company or raising capital, but agreed with the SEC that he should not raise that capital in public offerings.
HealthSouth, like the SEC, also opposed lifting the ban on Scrushy, who was released from federal custody in July 2012.
“Life goes on. That's really all I can say. We're disappointed,” Scrushy said. “I'm meeting with my attorneys and we're reviewing what our options are.”
The SEC and HealthSouth did not respond to requests for comment.
Scrushy has consistently denied doing anything wrong at HealthSouth and blamed subordinates for its problems. His prison term stemmed from a 2006 conviction for paying money to former Alabama Governor Don Siegelman's campaign for a state lottery in exchange for a seat on a state hospital regulatory board.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Oregon reservoir to be flushed because of urinating teen
- Denver wife killed 12 minutes into 911 call, sparking inquiry
- Obama, House Republicans trade accusations in thwarting immigration reform
- Recovery expert believes wreckage of missing plane located
- AC/DC not disbanding, lead singer Brian Johnson says
- Tea Party flap averted fraud probe by IRS, Justice, emails show
- 1986 Warhol self-portraits up for sale
- Hoax bomb case causes concerns in Boston
- US Airways’ pornographic tweet won’t cost anyone a job
- Vermont Senate OKs GMO labels as industry insists genetically modified crops are safe
- Study says regular pot use affects the brain