July 08, 2005
It ain't over for Richard Scrushy
Posted by Darren Roulstone

Richard Scrushy was acquitted of all charges in his criminal trial but he's not off the hook yet.  Two years ago, the S.E.C. pressed a civil case against him that has been on hold for the duration of his criminal trial.  His acquittal has now given the green light for the civil case to resume. 

According to the Wall St. Journal, the civil case alleges "accounting fraud, insider trading, and other violations."  The sought for penalties are huge: "The SEC is seeking $785 million in civil fines and restitution to shareholders plus interest from Mr. Scrushy...".

Another twist in the Scrushy saga is his pursuit of his former position at HealthSouth, a job he lost when the fraud came to light.  Scrushy has stated he wants his old job back to which the current CEO, Jay Grinney, replied: "[the] board has made it absolutely clear under no circumstances will he be coming back in any form or fashion."  That prompted this statement from one of Scrushy's lawyers: "If I was Mr. Grinney, I would keep a moving van close to my house because he's never been in a fight with us. And we know how to fight and win."  The SEC's civil case may make the fight moot; in addition to the fines, the SEC is seeking "to have [Scrushy] barred from serving as an officer or director of any publicly traded company." 

And last, all of this is in addition to a possible trial on perjury charges stemming from his comments to the SEC when the HealthSouth fraud was first investigated.  When I think of Scrushy's lawyers and the business he gives them I'm reminded of the hot dog vendor who follows Homer Simpson around.  When Marge asked why he keeps showing up, the vendor replies: "Lady, he's putting my kids through college!"

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