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September 23, 2005

Trustbuster

Federal prosecutors also appear to think that “blind trust”—at least as far as Bill Frist is concerned—may be an oxymoron:

NASHVILLE, Tenn., Sept. 23 /PRNewswire-FirstCall/ – HCA (NYSE: HCA) today announced that the company received a subpoena from the office of the United States Attorney for the Southern District of New York for the production of documents. The company believes the subpoena relates to the sale of HCA stock by Senator William H. Frist. The company intends to cooperate fully with the office of the U.S. Attorney in this matter.

And then there’s the little matter of the Securities and Exchange Commission. From the (paid-subscription) Wall Street Journal:

The SEC is looking into whether Mr. Frist had any inside knowledge of problems at the company that prompted his sales, according to a person with knowledge of the matter. The investigation is expected to expand to other individuals who also sold HCA shares prior to its earnings warning, this person said. The SEC routinely investigates stock sales ahead of major news, such as an earnings warning or a merger. Several insiders sold stock in the weeks leading up to HCA’s July 13 earnings warning. An SEC spokesman declined to comment.
In a statement released by Mr. Frist’s office, spokesman Bob Stevenson said the SEC “contacted Senator Frist’s office after the story appeared in the press about the sale of his Hospital Corporation of America stock. The Majority Leader will provide the SEC any information that it needs with respect to this matter.”
… Several HCA insiders also sold stock in the weeks prior to HCA’s July 13 warning that it would not meet its second-quarter earnings target. The stock, which had been near a 52-week high of $58.60 on June 22, fell to $49.90 from $54.74 on HCA’s disclosure.

I’m guessing 2008 could soon be off the agenda…

Posted by Stephen at 12:56 PM in Politics | Permalink | TrackBack (0)

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