The legal team for HealthSouth Corp. founder Richard Scrushy will challenge the Sarbanes-Oxley Act as part of its defense, and the strategy is likely to result in another delay of the former executive's trial on 85 counts of fraud, money laundering and conspiracy. Scrushy is the first CEO indicted for violations of the act, created in the wake of Enron and other disastrous corporate scandals to hold chief executives personally liable for financial misstatements. Scrushy's defense team indicated its intent to challenge the act during a status hearing today in Birmingham, Ala., the Associated Press reported. U.S. Attorney Alice Martin, who is heading the investigation of the alleged $2.7 billion accounting scandal at HealthSouth, said her office anticipated the move and would work with the U.S. Justice Department to defend the new law, the AP said. Because of the challenge and the complexity of the case, Martin said she would ask the defense to agree to an August 2004 trial date, the AP said. The scheduled start of Scrushy's trial recently was moved to Feb. 2, 2004, from January. If convicted on all counts, Scrushy, faces a maximum prison sentence of 650 years, forfeiture of $279 million in personal assets and more than $36 million in fines. -- by Julie Piotrowski
Scrushy's defense to challenge Sarbanes-Oxley Act
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.