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HealthSouth (C): The Trial
Werhane, Patricia H.; Collier, Cindy Eddins; Mead, Jenny Case E-0275 / Published December 8, 2005 / 6 pages.
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Product Overview

In the winter of 2005, ex-HealthSouth CEO Richard Scrushy went on trial for fraud after he and other executives at this outpatient surgery/rehabilitation/physical therapy company were accused of inflating profits. The trial attracted a lot of attention not only because of the size of the fraud and Scrushy's colorful personality and legendarily lavish spending habits, but also because this was the first case in which a company CEO was tried for violating the Sarbanes-Oxley Act, passed in 2002. This case summarizes the four-month trial, the tactics of both the defense and prosecution teams, and some of the long-term implications for companies accused of and/or found guilty of ethics violations.

  • Overview

    In the winter of 2005, ex-HealthSouth CEO Richard Scrushy went on trial for fraud after he and other executives at this outpatient surgery/rehabilitation/physical therapy company were accused of inflating profits. The trial attracted a lot of attention not only because of the size of the fraud and Scrushy's colorful personality and legendarily lavish spending habits, but also because this was the first case in which a company CEO was tried for violating the Sarbanes-Oxley Act, passed in 2002. This case summarizes the four-month trial, the tactics of both the defense and prosecution teams, and some of the long-term implications for companies accused of and/or found guilty of ethics violations.

  • Learning Objectives