District court upholds constitutionality of Sarbanes-Oxley Act in first challenge Chris Buell at 12:34 PM ET
[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.
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