Tuesday, November 30, 2004

Sarbanes-Oxley Act passes first court test

In the first court test of the Sarbanes-Oxley Act — which requires a public corporation's top executives to vouch for the company's financial reports — U.S. District Judge Karon Bowdre rebuffed Scrushy's argument that the law is unconstitutionally vague and should not be part of the indictment accusing him of massive fraud at HealthSouth.

Ruling in what she said was the first decision on the constitutionality of the 2002 law, Bowdre said jurors, and not the judge, should decide key questions of Scrushy's case.

Scrushy last year became the first CEO charged under Sarbanes-Oxley. Free on $10 million bond, he is accused of heading a scheme to overstate earnings by some $2.7 billion of the operator of rehabilitation hospitals and clinics.

His attorneys claimed the new law uses phrases like "willfully certifies" and "fairly represents" that make it all but impossible for corporate officers to tell if they are following the law. Prosecutors argued that similar language is used without problem in other laws.

In her 11-page opinion, Bowdre sided with the government and said it was up to a jury to decide if Scrushy met the letter of the law.

Sarbanes-Oxley Act passes first court test

Send to a friend:

0 Comments:

Post a Comment

<< Home

Previous articles

SOX 404 Trends for Next Year Beginning to Emerge

US to unveil concessions on accounting rules

Sarbanes-Oxley: Stop Whining! - Computerworld

Translating COSO for the CIO

Foolproof Compliance For Your IT Systems

Sterling Commerce Value-Added Network Attains Sarb...

Preventsys Ensures Sarbanes-Oxley 404 Compliance w...

No escape from the escalating cost of Sox

Disgruntled CFOs are calling it quits

Anglo-German action against Sarbanes-Oxley