Lawyers for Richard Scrushy, the former founder of HealthSouth
Corp., last week filed one of the first legal challenges to the
Sarbanes-Oxley corporate-crime law, calling it "unconstitutional
and overly vague," according to The Wall Street Journal. Scrushy,
who was ousted as HealthSouth chairman in March 2003, was the first
chief executive of a major company to be charged with violating
SOX, which was passed in 2002 in response to a rash of corporate
scandals.
The law imposes stiff criminal penalties on CEOs and finance
chiefs who certify false statements with the Securities and
Exchange Commission. Scrushy was indicted last fall on 85 criminal
counts - including three counts under SOX - for his alleged role in
a $2.7 billion accounting fraud at HealthSouth. Scrushy, who says
he's not guilty, is scheduled to go on trial in August, but the
legal move against SOX will probably delay things.