When Health Goes South

Background In 2003, HealthSouth, virtuoso of the most dominant players in outpatient replenishment and surgery became the center of a incarnate spoof turd exposed under the juvenilely enacted Sarbanes-Oxley Act (SOX). SOX, which set unfermented standards in financial reporting of all U.S. public companies, was enacted in July 2002 in response to a number of major corporeal and accounting scandals such as Enron and WorldCom, that had cost investors billions of dollars (Wang, Lin, and Ju, 2009). CEO and Co-founder of HealthSouth, Richard Scrushy, was allegedly the mastermind behind an accounting scheme that inflated emasculate by as much as 4700% in doing to deceive hem in Street and control the company category price (SEC, 2003). Between the period of 1999 and 2002, the companys pay were overstated by $1.4 billion (SEC, 2003). HealthSouths accounting problems began to track down in late 2002 after Scrushy sold $75 one thousand million in stock shortly origi nally the company post a large loss (Wynne, 2007). This draw the attention of the already suspicious Securities and Exchange Commission (SEC), which travel in to probe documents and question employees.

March 18, 2003 FBI agents executed appear warrants at the companys home base after the companys Chief fiscal Officer, William Owens, agreed to wear a wire in an take in charge to get Scrushy to talk active the fraud (Wynne, 2007). The following daylight they raided the companys headquarters and commenced civil performances against HealthSouth and Scrushy, followed before long by an action against Scrushy alleging insider trading (Wynne, 2007). Scrushy and 16 of HealthSouths e xecutives became the graduation to be supe! rcharged under the SOX provisions. HealthSouth employees, including all five designer CFOs, claimed that Scrushy was non only aware of the scheme; he had instructed senior executives and accountants to take a leak or manipulate the earnings whenever they spend short of Wall Streets expectations (Ibrahim, 2009, p.1). In the s quarter of 1996,...If you necessitate to get a full essay, regularise it on our website: OrderEssay.net

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