District court upholds constitutionality of Sarbanes-Oxley Act in first challenge

[JURIST] A federal district judge has upheld the constitutionality of the Sarbanes-Oxley Act [PDF] against a challenge by former HealthSouth CEO Richard Scrushy, the first executive charged under the act last year for his alleged oversight of a scheme to restate the companies by almost $2.7 billion. District Judge Karon Bowdre of the US District Court for the Northern District of Alabama rejected a challenge by Scrushy that the Act was unconstitutionally vague and charges against him under the Act be thrown out. Bowdre said that standards that may be unclear under the act should be weighed by the jury. The Act was passed in 2002 to address a series of corporate corruption and fraud cases by requiring corporate leaders to vouch for company financial statements. View the indictment [PDF] against Scrushy, who is free on $10 million bond. Filings in the case are available here. AP has more.



 

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.

© Copyright JURIST Legal News and Research Services, Inc., 2013.