$25 Million Settlement Reached in Class Action Lawsuit Against HealthSouth
By Danielle Briones
Published on August 04, 2005
The medical services chain will pay $7 million and insurance companies will cover the remainder of the settlement.
HealthSouth's retirement fund suffered losses due to a decline in stock share values. Share prices went down after a lawsuit was filed by the Securities and Exchange Commission, claiming the company was involved in fraudulent activities.
Three of HealthSouth's former financial executives have pleaded guilty to an accounting scheme that resulted in a $2.7 billion earnings overstatement.
The SEC lawsuit against former CEO Richard Scrushy is pending. Scrushy was found not guilty of the criminal charges filed against him.
The settlement is awaiting approval from a judge.
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