New details of Senate Majority Leader Bill Frist's dumping of HCA stock just before it plummeted should give the SEC even more to chew over as it begins a formal investigation, with subpoena power, into Frist's contact with insiders at his family-founded and -run company.
A new analysis by my Foundation for Taxpayer and Consumer Rights has found that Senator Frist made between $2 and $6 million by selling his HCA holdings just before stocks plummeted in the face of a bad earnings report. In addition, overly rosy earnings projections made by HCA executives just as Frist and HCA insiders were disposing of the stock en masse, point to a coverup by insiders intent on keeping stock prices high until a disappointing earnings report surfaced.
Frist trust agreements made public today by Consumerwatchdog.org also show that since the founding of his trust, Senator Frist directed trustees not to sell his HCA stock. Each of the Senator’s trust agreements acknowledged their high concentration in HCA stock, and specifically relieved trustees ‘from any obligation the Trustee might otherwise have to diversify the investments.’ In other words, this was a seeing-eye trust, not a blind trust.
As subpoenas begin to fly, Senator Frist will have a lot of explaining to do. My consumer group filed ethics complaints with Frist dating back to 2003 over his HCA holdings -- and he ignored them. Frist's sudden shock of "conscience" either has to do with presidential amibitions or pure greed.