After a rare government-ordered halt to trading of shares in embattled HealthSouth Corp. expired Thursday evening, the New York Stock Exchange on Friday ordered the stock to remain off-limits to traders.
The NYSE says in a statement that HealthSouth shares will stay frozen "while it reviews the suitability for continued listing in light of all current circumstances involving the company."
Trading in the ambulatory surgery center and rehabilitative medicine provider was halted at the opening of business Wednesday morning after the Securities and Exchange Commission ordered a two-day suspension. It was only the second time in the last 25 years that the SEC has shut down a NYSE-listed stock, according to news accounts.
The SEC sued the Birmingham, Ala.-based company and CEO Richard Scrushy for fraud on Wednesday, alleging that HealthSouth has intentionally overstated its earnings by at least $1.4 billion since 1999. FBI agents had raided HealthSouth headquarters the night before.
Also, former CFO Weston Smith agreed to plead guilty to securities fraud charges and cooperate with a criminal investigation against HealthSouth.
HealthSouth subsequently placed Scrushy and current CFO William Owens on administrative leave.