Litigation Release No. 19322 / August 2, 2005

Accounting and Auditing Enforcement
Release No. 2288 / August 2, 2005

Securities and Exchange Commission v. Kenneth K. Livesay, et al., United States District Court for the Northern District of Alabama, Civil Action No. CV-03-HS-0758-S

On July 25, 2005, the Honorable Virginia Emerson Hopkins, U. S. District Judge for the Northern District of Alabama, entered a Final Judgment as to defendant Cathy C. Edwards (Edwards). Edwards was a vice president of HealthSouth Corporation. The Final Judgment enjoined Edwards from further violations of Section 17(a) of the Securities Act of 1933 (Securities Act), Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and from aiding and abetting violations of Section 17(a) of the Securities Act, 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 and 13a-13 thereunder. Edwards was not ordered to pay a civil penalty based on her sworn representations in her Statement of Financial Condition. Edwards was also permanently barred from serving as an officer or director of a public company. Edwards consented to the entry of the judgment without admitting or denying any of the allegations of the Commission's Complaint.

The Commission's Complaint alleged that Edwards made false accounting entries to inflate reported operating results to enable HealthSouth to meet or exceed Wall Street earnings expectations.

See also: L.R. 18044/March 20, 2003; AAER No. 1744/March 20, 2003; L. R. 18059/April 1, 2003; AAER No. 1750/April 1, 2003; L. R. 18060/April 1, 2003; AAER No. 1749/April 1, 2003; L. R. 18070/April 4, 2003; AAER No. 1752/April 4, 2003; L. R. 18339/September 10, 2003; AAER No. 1853/September 10, 2003; L.R. 18700/May 10, 2004; AAER No. 2004/May 10, 2004; L.R. 18843/August 23, 2004; AAER No. 2083/August 23, 2004; L.R. 18904/September 28, 2004; AAER No. 2111/September 28, 2004; L.R. 18941/October 25, 2004; AAER No. 2128/October 25, 2004; L.R. 19123/March 7, 2005; and AAER No. 2206/March 7, 2005.