U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19123 / March 7, 2005
Accounting and Auditing Enforcement
Release No. 2206 / March 7, 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 March 4, 2005, the Honorable Virginia Emerson Hopkins, U. S. District Judge for the Northern District of Alabama, entered Final Judgments as to defendants Angela C. Ayers (Ayers) and Virginia B. Valentine (Valentine). Ayers was a vice president and Valentine was an assistant vice president of HealthSouth Corporation. The Final Judgments enjoined them 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 and 13b2-1 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. Ayers and Valentine were not ordered to pay civil penalties based on their sworn representations in their Statements of Financial Condition. Ayers was also permanently barred from serving as an officer or director of a public company. Ayers and Valentine consented to the entries of the judgments without admitting or denying any of the allegations of the Commission's Complaint.
The Commission's Complaint alleged that Ayers and Valentine made false accounting entries to inflate reported operating results to enable HealthSouth to meet or exceed Wall Street earnings expectations.