HealthSouth challenges constitutionality of Sarbox
The attorneys for former HealthSouth CEO Richard Scrushy - on trial on charges related to the company's $2.7 billion accounting scandal - have asked a judge to throw out 78 out of the 85 criminal charges against Scrushy and have said that the Sarbanes-Oxley Act is vague and its use in this case is unconstitutional.
Although 17 other former HealthSouth execs have pleaded guilty to fraud charges, Scrushy is pleading not guilty on all counts. His attorneys say most of the charges are flawed as they are all for basically the same offence, fraud, carried out in different ways and Scrushy should have only been charged for eight counts.
In a seperate filing, the attorneys are looking for a dismissal of another charge saying that the part of Sarbanes-Oxley being used by procescutors violates basic constitutional law because it makes criminal the most ordinary and non-intentional acts of corporate officials. Attorney Abbe Lowell says: "Section 906 of Sarbanes-Oxley imposes criminal liability on a corporate officer who certifies that his company's periodic reports comply with certain specific reporting regulations imposed by federal securities law, regardless of whether violations of those very regualtions would give rise to criminal liability in their own right.