PHILADELPHIA, Sept. 27, 2002 (PRIMEZONE) -- The law firm of Spector, Roseman & Kodroff, P.C. announces 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").
The lawsuit alleges that a widespread securities fraud has been perpetrated against purchasers of HealthSouth. 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.
The Securities and Exchange ("SEC") is now investigating the Company over its recent disclosures of lower earnings. The SEC notice sent to HealthSouth 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.
If you purchased HealthSouth securities during the Class Period, you may, no later than October 28, 2002 move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in HealthSouth securities during the Class Period, please contact Spector, Roseman & Kodroff, P.C. at classaction@srk-law.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman toll-free at 888-844-5862 or via E-mail at classaction@srk-law.com. For more detailed information about the firm please visit its website at http://www.srk-law.com
Spector, Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania and San Diego, California, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud. As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered on behalf of thousands of defrauded shareholders and companies.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca