A sad day…

June 28, 2005

So the verdict is in on former Healthsouth (HRC) Chairman and CEO Richard Scrushy and he’s been acquitted of all 36 charges, including the Sarbanes-Oxley charge, which is simply amazing. I’ll try to avoid making too much fun of the people of Birmingham here (though it’s very difficult). Still, it’s interesting to note that more thoughtful juries in New York (ones that were able to see through the legal hocus-pocus and PR-spin), found the other cavalcade of corporate crooks — Worldcom’s (MCIP) Bernie Ebbers, Adelphia’s (ADELQ) father-son team of John and Timothy Rigas, and Tyco’s (TYC) Dennis Kozlowski — guilty, despite the fact that there appeared to be much more evidence against Scrushy.

It’s beyond credulity that 12 former Healthsouth executives, including all five former CFOs, would plead guilty and testify that Scrushy knew that the books were being cooked. What a sad day for investors if CEOs can walk just by claiming to find religion and having the luck to appear before a jury of simpletons. And what a play-book for Ken Lay to borrow from during his upcoming trial.

A jury of your peers is a great ideal, but I’m pretty sure that if this case had been tried in New York, Scrushy might have found himself in a cell, perhaps adjacent to Kozlowski and company at Rikers.

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