A federal judge will allow the Securities and Exchange Commission to refile their lawsuit against HealthSouth Corp. founder Richard Scrushy.
The SEC had originally sued Scrushy in March 2003 after the discovery of accounting fraud at HealthSouth, but the case was put on hold when Scrushy was indicted on criminal charges.
The civil suit accuses Scrushy of lying to investors and falsifying records, and the SEC will have until Sept. 7 to amend its original case. Scrushy will then have until Sept. 30 to file a motion asking for the case to be formally dismissed. In the back-and-forth of the court system, the SEC then has until Oct. 28 to reply, and Scrushy's legal team has until Nov. 14 to make a final response.
Scrushy was acquitted in late June on all of the three dozen counts he faced in connection with a $2.7 billion accounting scandal that inflated earnings at the health care company. The civil suit seeks $786 million in penalties and restitution, and would not allow Scrushy to serve as an officer or director at any public company if found guilty.
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