The Swiss bank UBS and its former auditor Ernst & Young have agreed to pay $250.5 million to settle lawsuits brought by shareholders of HealthSouth in the wake of the hospital operators accounting fraud.
Under the settlements, UBSs insurers will pay $117 million to HealthSouth stockholders and $100 million to the health care providers bondholders. Ernst & Young will pay $33.5 million to bondholders. Both UBS and Ernst & Young have denied any wrongdoing.
This settlement allows us to resolve the litigation brought by the bondholders of HealthSouth and avoid lengthy litigation, said a statement forwarded by Ernst & Young spokesman Charles Perkins.
The settlements still require the approval of a judge. Ernst & Young had earlier agreed to pay $109 million in a related settlement last year with shareholders, while UBS agreed in 2008 to pay the company $100 million in a suit brought by shareholders.
Fifteen former executives at the company have pleaded guilty to artificially inflating earnings by $2.5 billion from 1996 to 2002, and one was convicted of fraud charges. HealthSouths former CEO Richard Scrushy was acquitted of criminal fraud charges but has been ordered to pay $2.7 billion to shareholders in a civil case. He is currently serving a sentence of six years and 10 months on separate bribery charges.
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