SEC files fraud charges against HealthSouth

HealthSouth Corp. and chairman Richard Scrushy were accused Wednesday of a massive accounting fraud that the government said inflated profits by at least $1.4 billion to mislead investors that the health care giant was keeping pace with Wall Street’s expectations.

Acting on Scrushy’s orders to “fix” earnings, senior accountants gathered in what they called “family meetings” to falsify results when HealthSouth’s performance failed to meet Wall Street forecasts, according to a complaint by the Securities and Exchange Commission.

Leadership

Vivendi co-chief resigns

Barry Diller resigned Wednesday as co-chief executive of Vivendi Universal Entertainment in a move that could help clear the way for the company’s cash-strapped French parent to sell its Universal Studios, Universal’s theme parks and other entertainment assets.

The decision is seen as clarifying Diller’s priorities, which had been a matter of confusion as he served simultaneously as head of Vivendi Universal Entertainment and chairman of USA Interactive, which operates the Home Shopping Network, Ticketmaster and Expedia.

Wall Street

Pillsbury helps boost General Mills’ earnings

General Mills Inc. reported Wednesday that its third-quarter earnings nearly tripled due to strong sales growth and gains in productivity that it’s achieving from its acquisition of Pillsbury.

The company also raised its profit forecast for the full year. General Mills earned $240 million, or 63 cents a share, in the three months ended Feb. 23, up from $82 million, or 22 cents a share, a year ago.

Delivery company

FedEx profits increase

The FedEx Corp. reported Wednesday that profits grew 23 percent in the third quarter largely from higher package volumes. Its shares rose.

The package-delivery company reported earnings of $147 million, or 49 cents per share, for the quarter ended Feb. 28 compared with $120 million, or 39 cents a share, a year ago.