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The Securities and Exchange Commission asked a federal judge Thursday not to throw out a civil fraud case against HealthSouth Corp. founder Richard Scrushy, who was acquitted on criminal charges that he directed a $2.7-billion fraud.
U.S. Judge Inge Johnson ordered the SEC last week to show cause why she shouldn’t dismiss the case in light of the June 28 verdict in Scrushy’s favor in Birmingham, Ala.
The commission said there was substantial evidence to prove civil fraud charges against Scrushy and that the burden of proof was lower than in a criminal case.
Scrushy’s lawyers have 10 days to respond to the SEC.
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