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Frist and Insider Trading

aps

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We have our majority leader in the House with all sorts of ethics violations, so I guess it should not come as a surprise that our majority leader in the Senate could possibly be unethical as well.

Frist was told way back then that his ownership in these stocks was a conflict of interest. He became majority leader in 2002. There were allegations that he felt that as majority leader, he thought he should have sold those shares. So why did he wait until 2005? What facts changed since either 1995 or 2002 that made him decide that there might be a conflict of interest? As pointed out in the article, Frist's spokeswoman's statements were very carefully worded. It seems highly suspicious to me. Anyway, we shall see what happens.

The article points out that even if he is exonerated, it will not be good for him in his possible run for president. Awww, isn't that too bad?

SEC, Justice Investigate Frist's Sale of Stock

By Jeffrey H. Birnbaum and R. Jeffrey Smith
Washington Post Staff Writers
Saturday, September 24, 2005; Page A01

Senate Majority Leader Bill Frist is facing questions from the Justice Department and the Securities and Exchange Commission about his sale of stock in his family's hospital company one month before its price fell sharply.

The Tennessee lawmaker, who is the Senate's top Republican and a likely candidate for president in 2008, ordered his portfolio managers in June to sell his family's shares in HCA Inc., the nation's largest hospital chain, which was founded by Frist's father and brother.

A month later, the stock's price dropped 9 percent in a single day because of a warning from the company about weakening earnings. Stockholders are not permitted to trade stock based on inside information; whether Frist possessed any appears to be at the heart of the probes.

A spokesman said Frist's office has been contacted by both the SEC and the U.S. attorney's office in Manhattan about his divestiture of the stock. HCA disclosed separately that it was subpoenaed by the same U.S. attorney's office for documents that were related to Frist's sale. Frist and HCA said they are cooperating.

Historians said they cannot recall any other congressional leaders who have faced federal inquiries into stock sales. Frist has denied any wrongdoing.

On Thursday, a Frist spokeswoman said the senator had not discussed the stock sale in advance with any HCA executives. On Friday, in a statement from Frist's office, the issue was couched a little differently. It said the senator "had no information about the company or its performance that was not available to the public when he directed the trustees to sell the HCA stock. His only objective in selling the stock was to eliminate the appearance of a conflict of interest."

According to Frist's office, the senator decided to sell all his HCA stock -- held in blind trusts managed by two companies for him, his wife and his children -- on June 13. Under the rules of the trusteeships, Frist had no control over the timing of the sale, Frist spokeswoman Amy Call said.

When the company disclosed that its second-quarter earnings would fall short of Wall Street expectations a month later, the stock price slid steeply. By that time, Frist's shares had been divested. The managers of one of the trusts told the senator on July 1 that his holdings had all been sold; the other trust managers said the shares were gone on July 8.

Frist's financial disclosure statement earlier this year placed the value of his blind trusts at between $7 million and $25 million.

Separately, documents unearthed yesterday by the Associated Press showed that Frist was told about stock trades in his blind trust. In documents filed with the Senate, trustee M. Kirk Scobey Jr. told Frist in 2002 that HCA stock had been transferred to his trust. Scobey, reached by phone last night, declined to comment.

The AP said that the documents disclosed that HCA stock worth hundreds of thousands of dollars was placed into Frist's blind trusts several other times in 2002 as well. Frist maintained in a television interview in 2003 that he did not know how much HCA stock he owned, if any. Spokesmen for Frist did not return phone messages last night.

HCA was founded in 1968 by Frist's father, Thomas Frist, his brother, Thomas Frist Jr., and Jack Massey, the former owner of Kentucky Fried Chicken. Frist's brother Thomas is a director and a former HCA chairman. The senator himself is a surgeon.

Democrats were quick to pounce on Frist's problem. Democratic National Committee Chairman Howard Dean urged the agencies involved to "fully and vigorously investigate Frist's suspicious stock trade." He added: "Republicans in Washington have made their culture of corruption the norm."

"Bill Frist has this all upside down," said Rep. Rahm Emanuel (D-Ill.), chairman of the House Democrats' campaign committee. "He thought Terri Schiavo could see and his trust was blind."

Watchdog groups also lashed the lawmaker. Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said she intends to petition the Senate Select Committee on Ethics to look into Frist's actions and determine whether he ran afoul of ethics rules involving blind trusts. A spokesman for the committee said the panel does not disclose whether it is investigating a senator.

In addition, the Foundation for Taxpayer and Consumer Rights urged congressional leaders to appoint an independent observer "to ensure a thorough, transparent investigation."

Analysts said that Frist's White House hopes might be harmed by the probe and that Republicans in general might be penalized politically. Because few voters know Frist well, learning about him through an investigation "would not be a good way to be introduced to the American public," said Stuart Rothenberg of the nonpartisan Rothenberg Political Report.

In addition, Rothenberg said the Republicans that Frist leads could also be tarnished. The probe "adds to the general Democratic ammunition," Rothenberg said.

"I do think this hurts his future ambitions, even if he's exonerated," agreed Jennifer E. Duffy of the Cook Political Report.

Congressional critics questioned the reason Frist gave for selling the stock. Senate rules allow lawmakers to divest all of their shares in a company from a blind trust, but only if they assume new duties and find that their ownership presents the appearance of a conflict of interest.

Frist has held HCA shares in a blind trust since he came to the Senate in 1995. He was promoted to majority leader in 2002. Frist regularly deflected concerns about owning the shares while leading health care debates by saying he kept them in a blind trust.

"I don't know what new duties he would point to above and beyond becoming majority leader, and that was three years ago," said Fred Wertheimer, president of Democracy 21, an ethics advocate.

Call, Frist's spokeswoman, said the stock sale was motivated solely by the senator's desire to avoid an appearance of conflict, but she could not cite any published criticism of his HCA holdings after April 2004.

http://www.washingtonpost.com/wp-dyn/content/article/2005/09/23/AR2005092301811.html
 

Stinger

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It was held in a blind trust. He had no knowledge of how many shares were there. When he told the trust he did not want to own it anymore he had no input on when it would be sold or at what value.

Do you have any proof what-so-ever that anyone knew the stock would drop as it did, knowledge that wasn't available to anyone. And anyone looking at the anyalist opinions would see that it is expected to be higher next year than it is today so anyone wanting to make money on it would surely hold onto it.

Why do you discount out of hand that he sold it because his detractors had been harping on it and demanding he do so?
 

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Stinger said:
It was held in a blind trust. He had no knowledge of how many shares were there. When he told the trust he did not want to own it anymore he had no input on when it would be sold or at what value.

Do you have any proof what-so-ever that anyone knew the stock would drop as it did, knowledge that wasn't available to anyone. And anyone looking at the anyalist opinions would see that it is expected to be higher next year than it is today so anyone wanting to make money on it would surely hold onto it.

Why do you discount out of hand that he sold it because his detractors had been harping on it and demanding he do so?
Lets see here. Frist says sell, then they sell. However Frist is claiming that he didnt know when they were going to sell. But here is something to think about. When you tell someone to sell something, it means right away. Thats the problem with Frist's little story. His mindset is of PT Barnum - Theres a sucker born every minute. However, the GOP supply of suckers was used up long ago. Nobody is buying what any of them are shoveling any more. The only proof you need is their favorability ratings, and they dont have GW's coat tails to hang onto anymore. Unless they want to drown, that is. If Dr. Frist quacks like a duck, then he is a quack.
 

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Not to mention, if Frist was worried about a conflict of interest, why would he not have sold the stock back while the Medicare Drug Benefit bill was still in congress? I mean back then there was a conflict of interest.

It's all pretty fishy if you ask me. Like I have heard southern preaches say many times, If the devil can't get to you with sex, he knows he can always use money and greed. I doubt they will ever get him on this, insider trading is very hard to prove.
 
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Stinger

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danarhea said:
Lets see here. Frist says sell, then they sell. However Frist is claiming that he didnt know when they were going to sell.
Yes that's how a blind trust works, for everyone subject to them. So do you have any evidence at all that something was done illegally? If you read the anyalist reccomendations they are postive and the stock is a "buy" rating.
 

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Stinger said:
Yes that's how a blind trust works, for everyone subject to them. So do you have any evidence at all that something was done illegally? If you read the anyalist reccomendations they are postive and the stock is a "buy" rating.
It was from Frist's own mouth. He said sell, then attempts to BS the public with a bit of hairsplitting. Sell means sell. Dont give me that "he didnt know when they would sell it" malarky. He gave the freakin order, and says so.
 

aps

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Stinger, sure I don't have proof that he did anything illegal. However, the coinicidence of his having his stock sold right before an announcement that caused the stock price to tumble is a little too much for me. He has owned these stocks since he became a senator in 1995. He has been told many times that ownership of this stock is a conflict of interest, and suddenly he decides after 10 years that he wants to sell? I am not buying his story at all. The careful wording of his spokeswoman is also suspect. It would be very easy for her to say, "Senator Frist in no way received any inside information and is totally innocent here." Instead, she limited the people to whom Frist could have spoken, saying he spoke to no executives. It's possible that Frist's brother told someone else who was not an executive who then told Frist. Regardless, I will let the facts fall where they may. But something is rotten in the state of Denmark.

Excellent points danarhea and Southern Democrat.
 

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It's amazing how partisan politics makes out every politician as absolutely stupid. How do these people get elected in the first place? If a Democrat doinks an intern; if a Republican sold a company 27 years ago; if a nominee wrote a paper as part of his job 24 years ago; if the Leader of the Senate sells stock; then these people are unethical? I am no fan of Democrats and Republicans because they only prey upon the public to get elected and then suffer each other instead of working for us but - where do you folks intend to get anyone to run this country? As long as you follow the antiquated and friction based two party system you will find that if a Republican does it then you can find a Democrat doing the same thing.

I've told a broker to "sell" many times in my life and from nothing more than following the news that I had been recently following. Never in my life did I even ask someone if I should sell or buy any stocks or bonds; I knew what I had and new the news.

Paragraph 13 finally lets you know where this fuel comes from. "Democrats were quick to pounce". Vultures with an R and a D in parenthesis. I read this Washington Post article and looked for the the paper to identify those who were down on Senator Frist. They give you a name and that's it. No "conservative" or "liberal" watchdog group. Just a Washington based "watchdog" group. Buzzards attracted by the latest media victim.

It is my belief that, as with other one-sided, media driven, pumped up scandals - Senator Frist will soon be asking, "Where do I go to get my reputation back?" Can anyone tell me if President Clinton raped all those women? How about Karl Rove; didn't he fart in the CIA building? What about Hillary's moo cows? What about James Carville working on a political campaign while employed on the air by CNN.

I don't expect the purely partisan to say it or believe it or even care but... I have followed Senator Frist for a number of years and this is a decent man. I would hope the media and their partisan hacks will run up against this and it should be enough to protect him. After all, what are the ethics of these hacks that make their bones on attacking others. Seems when there is an investigation we should question those who bark as well as those who are bitten.
:duel :cool:
 

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Quote:
Originally Posted by Stinger
Yes that's how a blind trust works, for everyone subject to them. So do you have any evidence at all that something was done illegally? If you read the anyalist reccomendations they are postive and the stock is a "buy" rating.



danarhea said:
It was from Frist's own mouth. He said sell, then attempts to BS the public with a bit of hairsplitting. Sell means sell. Dont give me that "he didnt know when they would sell it" malarky. He gave the freakin order, and says so.
I'm sorry but you simply do not know what you are talking about. He complied with the law. He can tell the blind trust he doesn't want to own something if he thinks it is in there (which he did because it was there when he established the blind trust and he had been pressured to sell) that is legal. He cannot tell them when to sell it or how much to get for it, the blind trust controls that. And if you bothered to do any research on MSC you would see that in fact it is a stock that should be held.

But once again proving that no matter what Republicans do the left will complain.
 

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aps said:
Stinger, sure I don't have proof that he did anything illegal. However, the coinicidence of his having his stock sold right before an announcement that caused the stock price to tumble is a little too much for me.
Have you looked at the stock. It has had a amazing run up for years and the drop wasn't much compared to it;s historical price trend. On top of that the analyist opinion is that it is a hold or buy and will outpreform the market, so selling it doesn't seem like the best thing to do from an investment stand point.

He has owned these stocks since he became a senator in 1995. He has been told many times that ownership of this stock is a conflict of interest, and suddenly he decides after 10 years that he wants to sell?
Yes and then he became president of the Senate,a very big difference and soon to be Presidential candidate another very big difference so it's seems perfectly logical that he would now get rid of the specious claims of conflict of interest.

I am not buying his story at all.
Well you'll have to look insider yourself to discover why not without any evidence of anything untoward.

The careful wording of his spokeswoman is also suspect.
:rofl of please give me a break.


But if this is going to be an issue then just wait for Hillary to announce and her cattlegate scandal come back up, will you hold her to the same standard of evidence before you begin to smell something illegal?
 

aps

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Yes and then he became president of the Senate,a very big difference and soon to be Presidential candidate another very big difference so it's seems perfectly logical that he would now get rid of the specious claims of conflict of interest.

He became Majority Leader in 2002--soooooooo what took him so long? What circumstances changed between 2002 and 2005 that would make him want to sell? You think it's his presidential bid? So somehow, it's not a conflict of interest if he is the Majority Leader in the senate, but could be a conflict of interest if he decided to run for president.

Well, the good news is that no matter what happens, this whole issue will not be good for him, which I will revel in. :)

BTW, the democrats are not the ones making a big deal--it's the Dept. of Justice and the SEC. The last time I checked, the Dept. of Justice was being run by a die-hard republican.
 

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Stinger said:
Quote:
Originally Posted by Stinger
Yes that's how a blind trust works, for everyone subject to them. So do you have any evidence at all that something was done illegally? If you read the anyalist reccomendations they are postive and the stock is a "buy" rating.





I'm sorry but you simply do not know what you are talking about. He complied with the law. He can tell the blind trust he doesn't want to own something if he thinks it is in there (which he did because it was there when he established the blind trust and he had been pressured to sell) that is legal. He cannot tell them when to sell it or how much to get for it, the blind trust controls that. And if you bothered to do any research on MSC you would see that in fact it is a stock that should be held.

But once again proving that no matter what Republicans do the left will complain.
He is under investigation. If what he did on the surface looked like it was completely on the up and up, he would not be under investigation. He may well have complied with the law, but he may not have either. If it really did look like he did nothing wrong, he would not be under investigation. Why is that concept so difficult to understand?
 

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aps said:
Yes and then he became president of the Senate,a very big difference and soon to be Presidential candidate another very big difference so it's seems perfectly logical that he would now get rid of the specious claims of conflict of interest.

He became Majority Leader in 2002--soooooooo what took him so long? What circumstances changed between 2002 and 2005 that would make him want to sell? You think it's his presidential bid? So somehow, it's not a conflict of interest if he is the Majority Leader in the senate, but could be a conflict of interest if he decided to run for president.

Well, the good news is that no matter what happens, this whole issue will not be good for him, which I will revel in. :)
Yes he will be a presidential candidate and since the left will try to make an issue our of such trivial substance seems reasonable he would just get rid of the stock from his families business, a shame people have to do such things but that is the reality of leftest politicing these days.

And why would it be good news which you would revel in?

BTW, the democrats are not the ones making a big deal--it's the Dept. of Justice and the SEC. The last time I checked, the Dept. of Justice was being run by a die-hard republican.
I think they made a normal deal out of it and you and the Dems are trying to make a BIG deal our of it.

But will you also make a big deal out of Hillary's investing if she decides to run, should she not also demonstrate that she was on the up and up?
 

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Stinger said:
Yes he will be a presidential candidate and since the left will try to make an issue our of such trivial substance seems reasonable he would just get rid of the stock from his families business, a shame people have to do such things but that is the reality of leftest politicing these days.

And why would it be good news which you would revel in?



I think they made a normal deal out of it and you and the Dems are trying to make a BIG deal our of it.

But will you also make a big deal out of Hillary's investing if she decides to run, should she not also demonstrate that she was on the up and up?
Hello pot, meet kettle. You only spent 8 years investigating the Clintons. You guys called him a murder. Accused him of selling plots in the National Cemetary to his contributers. All lies of course.

Frist is under investigation for insider trading. That is a big deal.

If he did nothing wrong, he has nothing to worry about.
 

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SouthernDemocrat said:
He is under investigation. If what he did on the surface looked like it was completely on the up and up, he would not be under investigation. He may well have complied with the law, but he may not have either. If it really did look like he did nothing wrong, he would not be under investigation. Why is that concept so difficult to understand?
Sorry one does not follow the other. How would the SEC and FEC know if it were on the up and up if they did not ask how the transactions occoured, which is all this "investigation" is. From Yahoo News

"Frist, a Tennessee Republican and a potential presidential candidate in 2008, directed trustees of his blind trust to sell the stock on June 13. The sale occurred in stages and was complete by July 8. On July 13, HCA cautioned investors that it wouldn't meet its earnings forecast. The news drove the stock's price down 9 percent that day to $50.05. Since then, it's slipped further, closing Friday at $47.60.
Typically, the SEC and federal prosecutors investigate such sales to determine whether the seller benefited from illegal insider information.
Frist's brother is the chairman emeritus of HCA."


An the analyist reports say the stock is still a buy or at least a hold. So if it is still a good investment how did he benefit?
 

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This stock was at historic highs. This is a very good time to sell. It is not unusual for people to sell for profit.

I believe it was one of the Rockefellers back during the first half of the last century that was asked how he made his money in the stock market. He replied, "I sold too soon." Good man. I've sold stock when friends and associates waited and saw it fall quickly. I still consider myself to be an ethical person.

It gets so old to say it but why not wait until the investigations are over rather than go with media or political partisans? Why not give a man a fair investigation that we would want for ourselves? Why not be decent ourselves?
:duel :cool:
 

aps

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Stinger said:
Yes he will be a presidential candidate and since the left will try to make an issue our of such trivial substance seems reasonable he would just get rid of the stock from his families business, a shame people have to do such things but that is the reality of leftest politicing these days.

And why would it be good news which you would revel in?
Because I cannot stand the guy.



I think they made a normal deal out of it and you and the Dems are trying to make a BIG deal our of it.

But will you also make a big deal out of Hillary's investing if she decides to run, should she not also demonstrate that she was on the up and up?
I would love for Hillary to be in deep doo doo. I DO NOT want her as the democratic nominee. I don't like her!
 

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SouthernDemocrat said:
Hello pot, meet kettle. You only spent 8 years investigating the Clintons.
Not me, the Justice Department did and it wouldn't have been near as long if he and Hillary had told the truth in the first place not obstructed justice and not urged witnessess to lie.

You guys called him a murder. Accused him of selling plots in the National Cemetary to his contributers. All lies of course.
Cite one time where I called him a murderer.

Frist is under investigation for insider trading. That is a big deal.
Actually as I already cited it is quite typical in such a case.

If he did nothing wrong, he has nothing to worry about.
Do you have one shread of evidence he does? What if he saw that all the insiders were selling off lots of stock so he decided to get rid of his? Nothing illegal about that, insider trades are published for the public view. Anyone could have gotten the same information simply by looking.
 

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It's amazing that people would think that a man who has the discipline to study and become a doctor; take the oath of healing and the oath of office; owns stock and sells it - is a crook before he is even investigated. I don't even know for sure if Bill or Hillary did anything wrong so who am I to accuse.

Politics stinks at this level and at theirs.
:duel :cool:
 

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[Moderator mode]

Merged the thread "Should Frist like Martha Stewart suffer the same"
into this one...same topic...

[/Moderator mode]
 

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SouthernDemocrat said:
Not to mention, if Frist was worried about a conflict of interest, why would he not have sold the stock back while the Medicare Drug Benefit bill was still in congress? I mean back then there was a conflict of interest.
So every congress person should have sold any and all health care related stocks so that none of them would have a conflict of interest?

How about the highway bill? Should every member of congress have sold any and all highway construction related stocks they may have owned.

How about the energy bill? Should every member of congress have sold any and all energy stocks they may or have owned?

Any banking bills up for a vote? How about those stocks?
 
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