Ex-HealthSouth CFO's lawyers told to produce docs
WASHINGTON, April 29 (Reuters) - A U.S. judge on Tuesday ordered lawyers representing a former chief financial officer of HealthSouth Corp (HLS.N) to turn over documents to investment bank UBS AG (UBSN.VX).
Michael D. Martin, a former chief financial officer at HealthSouth, has said he told UBS employees of a massive accounting fraud, which later prompted a federal investigation and a management upheaval at the rehabilitation health chain.
The U.S. District Court for the District of Columbia granted UBS's motion to force Martin's lawyers at the firm of Steptoe & Johnson to provide certain documents to the bank. UBS is seeking notes from Martin's lawyers about meetings with agents from the Federal Bureau of Investigation.
As HealthSouth's investment bank, UBS has been accused by investors are knowing about the multibillion dollar accounting fraud. Bondholders and shareholders have sued UBS in securities class action suits.
The court said UBS had argued that the civil litigation claims rest on Martin's testimony, and he is the only witness who has testified to personal knowledge that anyone from UBS was aware of any aspect of the HealthSouth accounting fraud.
HealthSouth is still recovering from a multibillion-dollar accounting fraud that led to the ouster of its founder and chief executive, a Securities and Exchange Commission probe and restatement of several years of earnings.
Founder Richard Scrushy was acquitted in 2005 in a criminal accounting case, but was ordered to pay $10 million last year to shareholders.
He had already agreed to pay $71 million to settle charges that he directed the company to overstate revenues by at least $2.6 billion. (Reporting by Kim Dixon; Editing by Tim Dobbyn)
