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Corporations and securities brief ~ SEC to pursue civil suit against Scrushy

[JURIST] Leading Tuesday's corporations and securities law news, a Securities and Exchange Commission (SEC) [official website] spokesman said today that the agency still plans to pursue a $785 million civil suit against former HealthSouth Corp. [corporate website] CEO Richard Scrushy [official website] despite his acquittal [JURIST report] last week in the criminal case against him. The SEC filed a complaint [text] in March 2003 accusing Scrushy of leading the company's $2.7 billion accounting fraud and signing false financial statements, but the case was delayed because it conflicted with the criminal charges. Last week, US District Judge Inge Johnson allowed Scrushy access to $150 million of his assets, which had been frozen throughout the criminal trial, and also ordered the SEC to "show cause" in order to prevent their case from being dismissed. The SEC is seeking the $785 million to cover fines against Scrushy and to pay back shareholders of HealthSouth. AP has more.

In other corporations and securities news...

  • The EU's Competition Commission [official website] voted Tuesday to allow Lufthansa AG [corporate website] to purchase Swiss International Airlines [corporate website]. In order for the $374.7-million takeover to be approved, Lufthansa had to agree to give up many of its takeoff and landing spots throughout Europe. The US yesterday approved the merger without requiring any concessions. The soon to be joined companies said in a joint press release that the purchase helps "ensure the long-term future of the air transport connections that are so crucial to Switzerland." In a press release, the commission said that the company's concessions were necessary so as to "not lead to higher prices or reduced choice of carrier." Bloomberg has more.

  • The US and Brazil have reached a tentative truce in their battle over US cotton subsidies. Brazil had filed a formal complaint [AP story] against the US for not complying with a WTO [official website] ruling that called on the US to cut its cotton subsidies. The complaint asked for higher tariffs on US exports to offset US subsidies. Seeking to make amends, President Bush today called for Congress to eliminate the offending subsidies. AP has more.

  • In a filing today, Northwest Airlines told the SEC that it must cut costs to remain viable. The airline said that it is in ongoing negotiations with its employees' unions but must lower its pension and labor costs. AP has more.

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About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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