The House Energy and Commerce Committee asked former UBS Warburg Managing Director Howard Capek to turn over all records concerning HealthSouth Corp. as part of the committee's investigation of alleged accounting fraud at the rehabilitation and surgery center chain. At issue are private e-mails written by Capek in 1999 portraying HealthSouth as a high-risk company while he publicly rated the stock a "strong buy." Capek resigned from UBS last week after an internal investigation disclosed he violated UBS policy on commenting on companies the bank was advising. In one e-mail, Capek called HealthSouth a "mess" and said, "I wouldn't own a share." In another incident, he referred to the company as "a pig that couldn't collect and convert sales into cash."
In a letter to Capek, the House committee said the correspondence raises "serious questions about the accuracy of what you may have been representing to the investing public." Capek's lawyer, Thomas Fitzpatrick, said Capek's remarks were inappropriate and off-the-cuff but not in conflict with his public opinion of HealthSouth. "There are numerous, numerous e-mails that show his personal views were consistent with his published research," Fitzpatrick said. Read the letter and related documents. -- by Tony Fong