Alabama
5:51 pm
Mon November 29, 2004

Judge Rules Fraud Law Applies to Scrushy

Birmingham, AL – A U-S District Judge in Birmingham says a new corporate fraud law can be used in the case against former HealthSouth chief executive Richard Scrushy. It was the first court test of the Sarbanes-Oxley Act, and the judge rejected Scrushy's argument that the act is unconstitutionally vague. Scrushy is the first C-E-O charged under the Sarbanes-Oxley Act, which became law in 2002. It requires chief executives and chief financial officers of public corporations to sign statements certifying the financial reports of their companies. Scrushy is charged with overstating HealthSouth earnings by nearly three billion dollars.