Friday, April 08, 2005

Scrushy Fights Use of His Testimony to S.E.C.

Richard M. Scrushy, the founder of the HealthSouth Corporation, has asked the judge in his fraud trial to exclude testimony he gave federal regulators that prosecutors contend proves he committed perjury. The trial is in recess until Tuesday. The government on Tuesday sought to introduce Mr. Scrushy's deposition to the Securities and Exchange Commission about his stock sales before the company announced a $175 million earnings charge that caused the share price to plummet.

Neal Seiden, an S.E.C. accountant, testified that he took the deposition and later interviewed HealthSouth executives who were cooperating with prosecutors in the criminal investigation into possible insider trading.

Mr. Scrushy told the S.E.C. that he signed financial statements because lawyers and accountants told him to, not because he knew they were accurate. Five former finance chiefs testified at his trial that he ordered them to falsify the books and that he got revenue reports showing HealthSouth earned far less than it claimed.

Scrushy Fights Use of His Testimony to S.E.C.

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