Class Action Securities Lawsuit Filed on Behalf of Investors who Purchased HealthSouth Corp., Securities by Wechsler Harwood LLP -- HRC


NEW YORK, Sept. 17, 2002 (PRIMEZONE) -- Please take notice that an investor represented by the law firm of Wechsler Harwood LLP filed a securities fraud class action lawsuit in the U.S. District Court for the Northern District of Alabama, on behalf of persons who purchased or otherwise acquired the securities of HealthSouth Corp. (NYSE:HRC) during the period from January 14, 2002, through August 26, 2002 (the "Class Period").

The suit names HealthSouth as a defendant, along with Richard M. Scrushy, HealthSouth's CEO and Chairman of the Board of Directors; Weston L. Smith, HealthSouth's CFO; and William T. Owens, HealthSouth's President and COO. The complaint asserts securities fraud claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder.

The complaint alleges that HealthSouth and its officers made materially misleading statements and omitted to disclose material adverse information about the Company's operations and prospects during the Class Period. In particular, in addition to other facts, the complaint alleges that HealthSouth misled the market concerning expectations for revenues and earnings by failing to disclose the impact on its operations of certain Medicaid reimbursement policies and, thereby, reimbursement rates to HealthSouth. Due to facts known to HealthSouth concerning the Medicaid reimbursement policies and rates, HealthSouth knew throughout the Class Period that it was in no position to meet the revenue and earnings guidance it had given to investors. Thus, those claims were knowingly or recklessly made without any reasonable basis. Meanwhile, during the class period, HealthSouth insiders, and in particular defendant Scrushy, sold nearly $100 million worth of HealthSouth stock.

As a result of Defendants' allegedly deceptive acts, the market price of HealthSouth securities was allegedly artificially inflated during the Class Period. A copy of the complaint can be obtained from the clerk's office of the court or from Wechsler Harwood LLP.

The law firm of Wechsler Harwood LLP has extensive experience in prosecuting investor class actions involving financial fraud. Wechsler Harwood LLP has prosecuted securities, antitrust and consumer class actions for over 10 years. For more information about Wechsler Harwood LLP, please visit its website at www.whhf.com.

If you are a member of the Class, you may request to serve as a lead plaintiff. The deadline for making such a request is October 28, 2002. If you have questions with regard to this case, your rights or serving as a lead plaintiff, you may contact one of the following:


 David Leifer, Wechsler Harwood LLP Shareholder Relations Department
 re:HealthSouth Corp. 
 dleifer@whhf.com, 
 at Wechsler Harwood LLP, 
 488 Madison Avenue, 
 New York, New York 10022 
 at (toll free) 1-877-935-7400 

More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca



            

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