ATLANTA, Oct. 1, 2002 (PRIMEZONE) -- Since filing a lawsuit against HealthSouth Corporation (NYSE:HRC) alleging securities fraud violations by the Company and certain of its officers or directors, Chitwood & Harley has continued its investigation into HealthSouth's billing practices. In the course of its investigation, Chitwood & Harley discovered that HealthSouth is being sued by the Department of Justice ("DOJ") for allegedly improper billing practices dating as far back as 1992. In addition, Chitwood & Harley learned that the Securities and Exchange Commission (the "SEC") commenced an investigation into HealthSouth's August 27, 2002 announcement after the filing of Chitwood & Harley's initial suit. Following that August announcement, HealthSouth's stock price has fallen 75%.
On May 17, as Chitwood & Harley previously announced, the Center for Medicare and Medicaid Services ("CMS") issued a Transmittal clarifying a long-standing policy that services provided to two or more patients at one time must be billed under the group therapy code. During that same time period, HealthSouth unloaded $1 billion in debt to investors without giving any hint that its billing practices were suspect or likely to change in the immediate future.
HealthSouth's suspicious timing is also manifest in Defendant Chairman Richard Scrushy's two massive insider sales. Scrushy's sale of over 5.2 million shares of stock in mid-May, combined with additional late July sales, resulted in gross proceeds of approximately $100 million. Chitwood & Harley further notes that the Company's own investigation into HealthSouth's billing problems and the timing of the insider sales is reportedly headed up by two Board members who are friends of Defendant Scrushy.
If you wish to receive a copy of the Department of Justice's recent intervention into the whistle blower suit against HealthSouth referred to above, or a copy of Chitwood & Harley's Complaint against the Company, please contact Martin Chitwood or Nikole Davenport at the addresses listed below.
If you bought the securities of HealthSouth between January 14, 2002 and August 27, 2002, you may, no later than October 28, 2002, move for appointment as lead plaintiff in the securities class action filed against HealthSouth. In order to serve as lead plaintiff, you must meet certain legal requirements which Chitwood & Harley would be happy to discuss with you. Chitwood & Harley is a law firm that concentrates its practice in representing victims of securities fraud and corporate mismanagement, as well as other complex litigation. Chitwood & Harley has been appointed lead counsel in major actions throughout the United States in both federal and state courts and has been instrumental in recovering billions of dollars on behalf of its clients.
If you wish to discuss this action or have any questions concerning this notice or your rights with respect to this matter, you may contact Nikole Davenport at 1-888-873-3999 (toll-free) or by e-mail at nmd@classlaw.com, CHITWOOD & HARLEY, 2300 Promenade II, 1230 Peachtree Street, N.E., Atlanta, Georgia 30309. For more information about Chitwood & Harley, please visit our website at www.classlaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca