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U.S. Securities and Exchange Commission

Litigation Release No. 18700 / May 10, 2004

Accounting and Auditing Enforcement Release No. 2004 / May 10, 2004

Securities and Exchange Commission v. Emery W. Harris, United States District Court for the Northern District of Alabama, Civil Action No. CV-03-J-0715-S

On January 20, 2004, the Honorable Inge Johnson, U. S. District Judge for the Northern District of Alabama, entered a Final Judgment as to defendant Emery W. Harris (Harris), formerly a group vice president, accounting and assistant controller of HealthSouth Corporation, enjoining him from further violations of Section 17(a) of the Securities Act of 1933, Sections 13(b)(5) and 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 13b2-1 and 10b-5 thereunder, and from aiding and abetting violations of 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. Harris was also permanently barred from serving as an officer or director of a public company. Harris 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 Harris 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.

See also: L. R. 18044 /March 20, 2003; L. R. 18059 / April 1, 2003; L. R. 18060 / April 1, 2003; AAER No. 1749 / April 1, 2003; L. R. 18070 / April 4, 2003; and L. R. 18339 / September 10, 2003



Modified: 05/10/2004