Friday, July 01, 2005

 

HealthSouth Board: please, stick to televangelism

Richard Scrushy, founder and CEO of HealthSouth Corporation, who as CEO presided over a seven-year, $2.7 billion (or so) accounting fraud, which took several years for forensic accountants to untangle and drove the company onto the pink sheets, has been acquitted in the criminal case against him. There are still civil fraud cases, including one by the SEC, pending.

The judge presiding over the SEC's civil trial has requested that they show cause for the civil trial to proceed.

Scrushy's defense: all the CFO's and accounting people hid this fraud from me, I had no idea and should not be held accountable for what they did.

Now Scrushy wants his old job back and he maintains that the board of HealthSouth unfairly fired him.

Implied in his defense is the presumption that he didn't think it was his job to keep an eye out for the fraud that went on, nor was it his job to evaluate whether the financial statements accurately expressed what was going on in his business.

Here's what I would like to know: exactly what was the job that he was getting millions of dollars a year for? He has amassed a personal fortune of almost $300 million. Surely it's not all for his pretty face.

At BEST, he was grossly incompentent. The Board states he is not welcome back. Let's hear it for reality-based financial reporting!
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