Former CFO advises students to be honest
Published: Friday, September 14, 2012
Updated: Friday, September 14, 2012 19:09
Former CFO of HealthSouth Corporation Weston Smith spoke to students Thursday night in Watkins Auditorium. He used his presentation Crossing the Line: an Insider’s Story to grab students’ attention from the get-go.
Smith began by talking about waking up one morning in bed and realizing he wasn’t living his life the way he should be. Then he mentioned the bed wasn’t actually a bed, but a bunk bed in a prison cell.
Smith was imprisoned for being involved in a multi-billion dollar fraud with the Fortune 500 company HealthSouth Corporation. The company had falsified documents that showed an inflation of $1.4 billion dollars over their actual earnings. He served a 27-month sentence in prison.
“I always believed I would never do anything like this but I really didn’t [believe]. When it came down to if I believed, I flunked. I failed miserably,” said Smith.
Smith’s speech gave a first-hand insight into the HealthSouth Corporation’s fraud but also gave students a lesson in integrity and ethics.
Smith became CFO of the company in 2002. He said that at the beginning of his career, he was blinded by the luxuries that came with his position. He was jetting off to the beach, sailing on yachts and buying lake homes, but somewhere down the line he became disgusted with himself. He started dreading going to work, started drinking, and he and his wife divorced.
“It shows a weakness on your side when you do something that you know is wrong,” Smith said.
Smith ultimately decided to take a stand and decided to leave the company. He, however, decided to go back after talking to CEO Richard Scrushy. He described Scrushy as not only personable and charismatic, but incredibly intimidating and persuading, a “Donald Trump on steroids.”
“Being a leader does not mean you have ethics and integrity. It should, [but it doesn’t],” said Smith.
The trouble for Smith started after his return. A new policy that was in place, the Sarbanes-Oxley Act, put responsibility of falsifying financial records into the hands of the CFOs and CEOs of companies, and if found guilty, there would be terms for legal actions.
Smith had been reluctant of signing the document but ultimately did. In doing so, it gave him no immunity from the felony he had committed, even after he had complied with police and blew the whistle on the company’s fraudulence.
Smith testified against his former boss and friend Richard Scrushy. Scrushy’s defense was that he had no previous knowledge of the fraud and he even went as far as to alter public opinion by starting his own talk show.
Ultimately, Smith was found guilty of violating the Sarbanes-Oxley Act and spent 27 months in jail. His boss was charged with 36 counts of fraud but was acquitted of all charges.
Smith, now a full time public speaker, said that his dream is for this negative to turn into a positive and to make an impact on students before they go into the world. His advice is to be ethical in both your professional and personal life, since a fault in one will lead to a fault in other parts of your life.