LITTLE ROCK, Ark., Sept. 26, 2002 (PRIMEZONE) -- The Law Firm of Cauley Geller Bowman & Coates, LLP previously announced that a class action has been filed in the United States District Court for the Northern District of Alabama, Southern Division, on behalf of purchasers of HealthSouth Corporation ("HealthSouth" or the "Company") (NYSE:HRC) publicly traded securities during the period between January 14, 2002 and August 27, 2002, inclusive (the "Class Period"). A copy of the amended complaint filed in this action is available from the Court, or can be viewed on the firm's website at http://www.cauleygeller.com/pr/healthsouth.pdf.
Cauley Geller has discovered that the Securities and Exchange Commission ("SEC") is now investigating the Company over its recent disclosures of lower earnings. The SEC notice, sent to HealthSouth last week, reportedly seeks 28 categories of information from December 1, 2001 through the present, covering in effect all company paperwork concerning a profit warning issued August 27, 2002. The SEC's investigation gives credence to Cauley Geller's lawsuit, filed earlier this month. The lawsuit alleges that a widespread securities fraud has been perpetrated against purchasers of HealthSouth Corporation ("HealthSouth" or the "Company") securities between January 14, 2002 and August 27, 2002. On August 27, 2002, when HealthSouth announced that certain Medicare "billing changes" would cause HealthSouth's earnings to fall well below guidance, the price of HealthSouth's common stock collapsed 58% in two days. Defendant Richard Scrushy claimed, at the time, that the full impact of this "new" information was only learned by HealthSouth on August 15, 2002, which explained why HealthSouth did not disclose the information to HealthSouth investors earlier. These statements were false as William Owens, HealthSouth's Chief Executive Officer, has now admitted that HealthSouth knew of a potential problem by at least June 6, 2002, and defendant George Strong sold nearly $2 million worth of HealthSouth stock between June 7- 11, 2002. HealthSouth and Scrushy's assertion that they disclosed this adverse information timely is further undermined by the fact that the Centers for Medicare and Medicaid ("CMS") have stated that the "new" information "identified" by HealthSouth and Scrushy was not "new" information at all, but a mere clarification of existing policy. Moreover, CMS had never permitted healthcare providers to seek payment for individual services when such services were, in fact, provided not to an individual but to a group of individuals, and HealthSouth was seeking such improper reimbursement nonetheless. Investors lost millions while defendant Scrushy sold over $50 million worth of HealthSouth stock at artificially inflated prices before the collapse.
If you bought HealthSouth publicly traded securities between January 14, 2002 and August 27, 2002, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than October 28, 2002. If you are a member of this class, you can join this class action online at http://www.cauleygeller.com/sign_up.html. Any member of the purported class may move the Court to serve as lead plaintiff through Cauley Geller or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Cauley Geller is a national law firm that represents investors and consumers in class action and corporate governance litigation. It is one of the country's premiere firms in the area of securities fraud, with in-house finance and forensic accounting specialists and extensive trial experience. Since its founding, Cauley Geller has recovered in excess of two billion dollars on behalf of aggrieved shareholders. The firm maintains offices in Boca Raton, Little Rock and San Diego.
If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm or visit the Firm's website at www.cauleygeller.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca