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U.S. Securities and Exchange Commission


Litigation Release No. 19743 / June 28, 2006

Accounting and Auditing Enforcement Release No. 2450 / June 28, 2006

SEC v. William T. Owens, et al., United States District Court for the Northern District of Alabama, Civil Action No. CV-03-CO-0720-S

On May 22, 2006, the Honorable L. Scott Coogler, U. S. District Judge for the Northern District of Alabama, entered a Final Judgment as to defendant William T. Owens (Owens), who formerly served, during various periods, as Chief Financial Officer, Executive Vice President, President, and Chief Operating Officer of HealthSouth Corporation. The Final Judgment enjoined Owens from future violations of Section 17(a) of the Securities Act of 1933 (Securities Act) and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5 and 13b2-1 thereunder, and from aiding and abetting violations of Section 17(a) of the Securities Act and Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-13 and 13a-14 thereunder. Owens was also permanently barred from serving as an officer or director of a public company. Owens was ordered to pay disgorgement of $10,837,292 and prejudgment interest of $4,728,219, provided that $2.5 million of the disgorgement and prejudgment interest is deemed satisfied by forfeiture and restitution ordered against him in the related criminal proceeding. The judgment waived the remainder and did not order Owens to pay a civil penalty based on his sworn representations in his Statement of Financial Condition. Owens consented to the entry of the judgment without admitting or denying any of the allegations of the Commission's Complaint.

The Commission's Complaint, filed on March 31, 2003, alleged that Owens made or directed HealthSouth employees to make false accounting entries to inflate reported operating results in order to meet or exceed Wall Street earnings expectations. In the related criminal proceeding, Owens was sentenced to serve five years incarceration, among other things.

See also: Litigation Release Nos. 18044 (March 20, 2003), 18059 (April 1, 2003), 18060 (April 1, 2003), 18070 (April 4, 2003), 18339 (September 10, 2003), 18700 (May 10, 2004), 18904 (September 28, 2004) and 19123 (March 7, 2005).



Modified: 06/28/2006