BIRMINGHAM, Ala. — A judge yesterday ordered former HealthSouth CEO Richard Scrushy to pay $2.876 billion to shareholders who sued over a massive accounting fraud that nearly sent the rehabilitation chain into bankruptcy.

Circuit Judge Allwin E. Horn, who heard the case without a jury, ruled in favor of HealthSouth shareholders who filed a lawsuit claiming Scrushy was involved in years of overstating the company's earnings and assets.

Horn wrote in his ruling that Scrushy "knew of and participated in" the faked reports filed with regulators from 1996 to 2002.

The judge said the HealthSouth founder also "consciously and willfully" violated his financial responsibilities as CEO.

DISCOVER FINANCIAL HELPED BY LAWSUIT

CHARLOTTE, N.C. — Discover Financial Services said yesterday it managed to remain profitable during its fiscal second quarter, thanks to a payment from a lawsuit settlement.

Without the gain from the settlement, the credit-card lender would have had a loss from rising defaults and delinquencies.

Nearly all lenders are seeing more customers stop making their monthly payments as the economy falters and unemployment surges.

In the United States, Discover said its sales volume fell 4 percent from a year ago, reflecting lower gas prices and a general decline in consumer spending.

The Riverwoods, Ill.-based company also declared a dividend of 2 cents a share.

SEC IMPLEMENTING NEW PROTECTIONS

WASHINGTON — Making it easier for shareholders to seat directors on company boards, restricting short-selling in down markets, strengthening oversight of mutual funds, and tightening scrutiny and standards for investment advisers are among the pro-investor initiatives being undertaken by the Securities and Exchange Commission, the agency's chairwoman said yesterday.

The agency also plans to work to identify emerging risks to investors, including so-called "dark pools," automated trading systems that do not provide public quotes, Mary Schapiro said in remarks prepared for delivery to the the New York Financial Writers Association in Manhattan.

STANFORD FINANCIAL CHAIRMAN ARRESTED

DALLAS — Texas billionaire R. Allen Stanford, chairman of the troubled Stanford Financial Group, surrendered to FBI agents in Virginia yesterday, his attorney said.

Authorities plan to unseal an indictment charging Stanford today, the officials said, speaking on condition of anonymity because they were not authorized to discuss the case.