Health South

INDEPTH: HEALTH SOUTH STORY

Richard Scrushy

Richard Scrushy, the first CEO to face charges under the SarbanesOxley Act, was acquitted Tuesday of all charges relating to the $2.7billion US fraud at HealthSouth Corp., the health services company he founded. Scrushy, who was the former CEO of HealthSouth, had been facing 36 counts of conspiracy, fraud, money laundering, issuing a false corporate report and making false statements to regulators. He could have been sentenced to life if he had been convicted.

The Sarbanes-Oxley Act requires CEOs to certify the accuracy of the financial statements of their companies.

The verdict came after a month of jury deliberations in Birmingham, Ala. His trial began in January. Scrushy blamed the accounting wrongdoings entirely on his subordinates at HealthSouth, including the company's five chief financial officers who worked with Scrushy over the years. The five had all testified against Scrushy at the trial.

Since the scandal broke in 2003, no fewer than 15 HealthSouth executives have pleaded guilty. Scrushy was fired as CEO in March 2003. The company's current management said he won't be offered his old job back.

"Under no circumstances will Mr. Scrushy be offered any position within the company by this management team or by this board of directors." The scandal drove HealthSouth close to bankruptcy. It lost its NYSE stock listing and its stock price now hovers at barely a fifth of its previous value. About 41,000 people still work at the company.