Less than a week after The Securities and Exchange Commission temporarily suspended trading in the securities of HealthSouth Corporation, Dorothy Lee Warren, a Montgomery resident, has filed a securities fraud lawsuit against the Birmingham based company and CEO Richard Scrushy.

The complaint alleges numerous serious violations of Federal Securities Laws, including the issuing of false financial statements, and accuses both the company and Scrushy of civil fraud.

HealthSouth is accused of intentionally and falsely inflating its financial position on orders from Scrushy to make it appear the company was meeting or exceeding Wall Street expectations. This is another case where a giant corporation lied to both the Government and the public – and while Scrushy and others profited, investors suffered tremendous financial losses as a result of the numerous acts of fraudulent conduct.

“Mr. Scrushy has personally profited from the fraudulent scheme he put in place to artificially inflate both the earnings and assets of the company,” said Jere Beasley, one of the lawyers representing Ms. Warren. “The CEO knew that HealthSouth’s financial statements were false and greatly overstated the company’s operating results. Our client was a victim of this corporate giant and its greedy CEO. This case is just another example of how some in Corporate America believe they can lie, cheat, and steal and not have to pay the consequences,” Beasley said this week.

HealthSouth is one of the nations largest healthcare providers, operating 1,700 facilities in the United States, Brittain, Australia, Canada, Peurto Rico, and Saudi Arabia. The Warren case was filed in the Circuit Court of Montgomery County, Alabama. Attorneys representing Ms. Warren are Jere Beasley and Rhon Jones of Beasley, Allen, Crow, Methvin, Portis & Miles, P.C.

Beasley indicated that other lawsuits against the company will be filed very soon. “It is likely that other individuals and companies will be added as Defendants as this fraudulent scheme unravels,” he said. “This is only the first of what will be thousands of civil cases,” he said.



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