When Health Goes South

Background In 2003, HealthSouth, sensation of the most dominant players in outpatient replenishment and surgery became the center of a incarnate sham turd exposed under the juvenilely enacted Sarbanes-Oxley Act (SOX). SOX, which set rude(a) standards in financial reporting of all U.S. public companies, was enacted in July 2002 in response to a number of major corporal 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 scribble by as much as 4700% in specialise to deceive protect Street and control the company channel price (SEC, 2003). Between the period of 1999 and 2002, the companys lucre were overstated by $1.4 billion (SEC, 2003). HealthSouths accounting problems began to leave in late 2002 after Scrushy sold $75 one thousand million in stock shortly before t he company post a large loss (Wynne, 2007). This pull the attention of the already suspicious Securities and Exchange Commission (SEC), which locomote in to probe documents and question employees.

March 18, 2003 FBI agents executed research warrants at the companys home base after the companys Chief financial Officer, William Owens, agreed to wear a wire in an hear to get Scrushy to talk active the fraud (Wynne, 2007). The following daytime they raided the companys headquarters and commenced civil transactions against HealthSouth and Scrushy, followed before long by an action against Scrushy alleging insider trading (Wynne, 2 007). Scrushy and 16 of HealthSouths execu! tives became the graduation to be aerated 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 fix or manipulate the earnings whenever they spend short of Wall Streets expectations (Ibrahim, 2009, p.1). In the s quarter of 1996,...If you trust to get a full essay, regularise it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay