June 28, 2005
Droopy Sox
So, the CEO of HealthSouth, Scrushy, was declared innocent today after his company was discovered to have commited nearly $2.7 billion in fraud. Apparently 5 former finance honchos all pled guilty to the fraud. And Scrushy (whose name is oddly reminicent of those elastic hair ties) claimed he didn't know anything about the fraud... and it was all the fault of the finance dudes.
Now, I'm no lawyer, but my layman's understanding of the Sarbanes-Oxley law is that it was specifically designed to prevent CEOs from claiming ignorance in instances like this.
I'm not saying that Scrushy is guilty. I haven't read the facts of the case. But the guy's defense, as it reads in the news, is "I didn't know what was happening. My finance people did it behind my back." I thought that was the whole freakin' point of this law where CEOs are legally liable for the financial statements of the company.
It just seems wrong to me. At least, this is the first CEO who has be found not guilty under this law. Hopefully this won't start a trend.
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