The Securities and Exchange Commission last week charged that HealthSouth and Chief Executive Richard Scrushy inflated earnings by $1.4 billion since 1999. The company and CEO face an expanding criminal probe, SEC efforts to freeze assets and a growing list of shareholder lawsuits.

The stock's decline suggests investors expect HealthSouth to be forced into bankruptcy, following companies such as Enron and WorldCom that were also entangled in accounting scandals. HealthSouth, which is trying to cover $345 million in bonds due April 1, said it's making headway with lenders to avoid that fate.

''It's certainly an egregious situation,'' said Sherry Reser, a spokeswoman for the California State Teachers' Retirement System, the third-biggest U.S. pension fund. She said the fund held 1.3 million HealthSouth shares and two of its high-yield bonds. She estimated that it would lose $10.6 million on the shares and $600,000 on the bonds.

Shares of HealthSouth, the biggest U.S. operator of rehabilitation hospitals, began trading over the counter at 1:11 p.m. New York time and fell $3.80 to 11 cents as of 4 p.m. Trading in the shares had been halted since before the SEC's announcement about the charges March 19 and the broadened HealthSouth investigation.

On Monday, HealthSouth said accounting inaccuracies might have begun as early as 1986, which would make its financial statements unreliable since then.

Shares of the Birmingham, Ala.-based company reached a 52-week high of $15.90 in May 2002 in New York Stock Exchange composite trading. That gave HealthSouth a market value of more than $6 billion, compared with about $44 million today.

The New York Stock Exchange said it will continue its suspension of trading in the shares while it seeks the delisting. The exchange cited investigations by the SEC and the U.S. Justice Department for its decision.

''There's essentially no confidence that there's any value on the equity side of the balance sheet,'' said Frank Morgan, a Jefferies & Co. analyst who rates HealthSouth ''underperform'' and doesn't own shares.

''There's skepticism of the company's ability to move quickly enough to avoid a bankruptcy filing,'' Morgan said.

The company has more than 40 facilities in South Florida, including Doctors' Hospital in Coral Gables.

Scrushy, who flies some of the company's corporate jets, owns a $3 million lakefront weekend home in Alabama and a 10,700-square-foot house in Palm Beach that has five bedrooms, eight bathrooms and a boat dock, real-estate records show. He sold another Palm Beach property last year for $4.15 million, the Palm Beach Post reported. Scrushy owns a 92-foot yacht named ''Chez Soiree,'' according to The New York Times.