In anticlimactic news, former HealthSouth chief executive Richard Scrushy will pay $81 million to settle civil charges brought by the Securities and Exchange Commission.While SEC spokespeople have said that the amount of the deal is among the most expensive for an executive settlement, a federal judge ruled that the judgments in three other civil cases brought against Scrushy could count as a $71.5 million credit toward the disgorgement to the SEC.
As part of the deal, Scrushy neither admitted nor denied accusations that he bears responsibility for HealthSouth’s $2.7 billion accounting fraud, though he will be barred from serving as an officer or director of a publicly traded company for five years.
The SEC had originally included HealthSouth as a defendant in the lawsuit, but the company settled in 2005 for $100 million.
The deal ends a lawsuit the SEC filed four years ago, when the HealthSouth fraud was revealed. Since then, 15 former executives have pleaded guilty and another was convicted.
Scrushy was acquitted on all criminal charges in the fraud in a 2005 trial, but had still faced the SEC’s civil lawsuit and several claims from investors in the health care company. A class-action lawsuit by shareholders and bondholders is still pending in federal court, in addition to a derivative action in state court.
Last year, Scrushy was found guilty by a federal jury of bribing the former governor of Alabama, but is planning to appeal. He has since become a TV preacher in HealthSouth's hometown of Birmingham.
