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Timeline of Accounting Scandal at HealthSouth

July 10, 2003: The House Energy and Commerce Committee releases documents showing that UBS AG analyst Howard G. Capek referred to HealthSouth as a "pig" that couldn't "collect and convert sales into cash" in a 1999 e-mail message. The message was written just weeks after Capek appeared alongside a UBS investment banker at a HealthSouth board meeting to help promote a deal to spin-off a portion of the company's business.

July 7, 2003: HealthSouth announces it will try to avoid bankruptcy by conserving cash and hiring experts to help unload underperforming assets.


Former HealthSouth CEO Richard Scrushy, 50, was a self-made son of the new South, a former teenage parent who hauled himself up from a menial job to become an emperor of the new economy. (Steve Barnette - AP)

July 2, 2003: A UBS AG stock analyst who long maintained bullish ratings on HealthSouth resigns after UBS gave congressional investigators an e-mail the analyst wrote in 1999 that appeared to contradict his publicly stated opinion about the company.

June 11, 2003: The House committee investigating accounting fraud at HealthSouth asks the company's former chief executive to produce a slew of information and documents.

May 21, 2003: Congressional investigators release a 1998 letter from an anonymous writer that warned auditors at Ernst & Young of serious accounting problems at HealthSouth, about 4 1/2 years before regulators swooped down on the Alabama company.

May 8, 2003: The House Energy and Commerce Committee demands that investment-banking giant UBS Warburg turn over hundreds of documents as part of the committee's investigation into alleged wrongdoing at HealthSouth.

April 22, 2003: The House Energy and Commerce Committee begins an investigation into what auditors and board members knew about questionable accounting and billing practices at HealthSouth.

March 31, 2003: HealthSouth fires Scrushy and its auditors as a third finance official pleaded guilty to criminal fraud. Separately, the Securities and Exchange Commission filed civil charges of accounting fraud and insider trading against all three finance executives.

March 26, 2003: William T. Owens, chief financial officer of HealthSouth, pleads guilty to doctoring financial statements at the company, a week after its former chief financial officer pleaded guilty.

March 19, 2003: The Securities and Exchange Commission files civil fraud charges against HealthSouth and Scrushy for allegedly duping investors into believing the company had met earnings targets.


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