The ax has fallen on HealthSouth's founder and CEO. HealthSouth's board of directors unanimously voted to fire Richard Scrushy because of a growing accounting scandal.
The company said Scrushy, who built HealthSouth into a leading health care chain, also was being asked to resign from the board.
In a further bid to wipe clean its slate, HealthSouth said it would fire longtime outside auditor Ernst & Young, which has said it is cooperating in a federal investigation of the company.
The government filed a civil lawsuit this month accusing HealthSouth and Scrushy of overstating earnings by at least $1.4 billion since 1999 to make it appear the company was meeting Wall Street expectations.
The scandal also resulted in two former chief financial officers pleading guilty to fraud charges.
The company said Scrushy's dismissal was retroactive to March 19, when he was placed on leave.
Scrushy could be forced to repay any bonuses and extra compensation based on overstated profits should the company be forced to restate its earnings.