- The Washington Times - Friday, September 23, 2005


The Securities and Exchange Commission and federal prosecutors are investigating Senate Majority Leader Bill Frist’s sale of stock in HCA Inc., the hospital operating company founded by his family.

In a statement released yesterday, the Nashville, Tenn.-based company said federal prosecutors for the Southern District of New York issued a subpoena for documents that HCA thinks are related to the senator’s sale of its stock.

Mr. Frist’s office confirmed the SEC is looking into the sale.

The SEC also contacted HCA yesterday to informally request copies of the subpoenaed documents, HCA spokesman Jeff Prescott said. “We, of course, will comply with that request.”

Mr. Frist, a Tennessee Republican, traded using only public information and only to eliminate the appearance of a conflict of interest, Frist spokesman Bob Stevenson said in e-mail yesterday.

“Not surprisingly, the Securities and Exchange Commission contacted Senator Frist’s office after the story appeared in the press about the sale of his Hospital Corporation of America stock,” Mr. Stevenson said. “The majority leader will provide the SEC any information that it needs with respect to this matter.”

Frist spokeswoman Amy Call declined to comment on the timing of the sale, saying, “His only objective in selling the stock was to eliminate the appearance of a conflict of interest.”

HCA, the nation’s largest for-profit hospital company, was founded by Mr. Frist’s father. His brother was formerly its CEO and chairman and remains on the board of directors.

Mr. Frist asked a trustee to sell all his HCA stock in June, near a 52-week stock price peak of $58.40 and at the same time HCA insiders were selling off shares. Reports to the Securities and Exchange Commission showed insiders sold about 2.3 million shares, worth about $112 million, from January through June, said Mark LoPresti of Thomson Financial.

The sale came about two weeks before the company issued a disappointing earnings forecast that drove its stock price down almost 16 percent by mid-July.

The value of Mr. Frist’s stock at the time of the sale was not disclosed.

The sale of stock was first reported Monday by Congressional Quarterly. On Tuesday, the Associated Press reported that the stock was sold at or near its peak between June 13, when Mr. Frist asked the shares to be sold, and July 1, when he was told the sale was complete.

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