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Discussion in 'Current Events' started by Bullypulpit, Sep 29, 2005.

  1. Bullypulpit
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    Bullypulpit Senior Member

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    <a href=http://news.yahoo.com/news?tmpl=story&u=/ap/20050928/ap_on_go_co/frist_stock_1>The SEC has upgraded its investigation</a> into Bill Frist's sale of HCA stock shortly before the stock tanked following the release of news regarding, shall we say, disappointing earnings. It should also be noted that several HCA corporate officers including the CEO and the Treasurer sold off HCA shares to the tine of some $112 million during the same time that the good Senator ordered his shares liquidated.

    Didn't Martha Stewart do jail time for just the same thing?...You know?...Insider trading?...Tch..Tch...Tch...Looks like Billy boy could wind up doin' some time in Club Fed. Unless, like Dubbyuh, who dumped his shares in Harken Energy just before THAT stock tanked, AND while he was sitting on the company's audit committee, the chairman of the SEC was a close friend of the family and swept the whole issue under the rug.

    Do the ethical lapses of the Republican leadership disturb you? If not, your moral compass is in dire need of adjustment.
     
  2. theim
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    theim Senior Member

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    Moving on hmm? I suppose you have to find something to do now that the Tom DeLay thing is ALREADY collapsing around you. (1 count of CONSPIRACY? rofl)
     
  3. GotZoom
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    GotZoom Senior Member

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    He did not know how many shares he had - it was in a Blind Trust.

    Combined the ongoing Tennessee "ethics" situation, he probably felt it best to sell, and since all the big execs were selling, he thought that would be a good time. He told the trust to sell, but had no control when the trust would actually sell the shares.

    ----

    Senate Majority Leader Bill Frist's move to sell his remaining shares of HCA Inc. stock in June came at the tail end of at least a three-month period in which many of the company's top executives were cashing in long-term stock options for millions of dollars in profits.

    A review by The Tennessean of stock transactions by HCA insiders between April 1 and June 30 shows the group as a whole sold nearly 1.8 million shares of stock worth nearly $100 million over that period. The data come from Securities and Exchange Commission filings used by Wall Street analysts to track whether executives are accumulating or selling shares in their own companies.

    Watchdog groups have criticized Frist's stock sale and have asked the Securities and Exchange Commission to investigate the timing of the transaction. Frist's order to a blind trust to sell his shares came on Monday, June 13, one month before the stock took a nearly 9% drop in a single trading day.

    The New York Times reported today that the Securities and Exchange Commission had contacted FristÂ’s office about the sale in June of his shares in HCA. A spokesman for Frist said the majority leader will provide the SEC any information that it needs with respect to this matter.

    Frist was not alone in selling shares in the Nashville-based health-care company.

    For example, in the five trading days before Frist made his sell order, HCA's top executives and directors sold 228,800 shares of stock worth $12.4 million. Most of the transactions came as company executives exercised past stock options that HCA had given to them as performance incentives over a long period of time.

    Stock analyst Mark LoPresti with Thomson Financial said the wave of stock sales by HCA executives was a bearish sign that could have been picked up by savvy investors.

    "What you did have was HCA people selling in record numbers," LoPresti said. "It sends a signal that they think they're getting a good price, and they're taking the shares off the table."


    "Why would (the average investor) want to increase holdings when other people are unloading theirs?"

    It's impossible to say that the executives or Frist had advance knowledge of an earnings report issued by HCA in mid July warning of weaker second-quarter profits, the stock analyst said. That report led directly to the 9% dip in the company's stock on July 13.

    LoPresti said the only other period in which HCA executives sold a comparable volume of stock was in the spring of 2002, and the company's shares fell 30% over the next 12 months.

    LoPresti said he can't get inside the heads of individuals to determine exactly why they sold shares at a given time.

    Still, Frist's stock sale and the fact that it came amid a wave of selling by current HCA insiders has caused political troubles for the potential 2008 presidential candidate.

    Frist dodged the issue yesterday, with his staff cutting off questions from reporters as he left a rally at the Capitol in support of John Roberts's nomination to be chief justice of the Supreme Court. Aides again refused requests to interview Frist about the sale.

    "He's not going to talk about it," spokeswoman Amy Call said.

    If Frist sold his HCA stock in the midst of a massive insider sell-off, that could cause him more problems in Washington. "It definitely gives you pause," said Larry Noble, executive director of the nonpartisan Center for Responsive Politics, a government watchdog group. "It goes beyond just the question of whether or not he complied with ethics rules in terms of selling stock in the blind trust. Now he may be dealing with an even more serious allegation having to do with insider trading."

    The Foundation for Taxpayer and Consumer Rights, a Santa Monica, Calif.-based group that complained to the Senate Ethics Committee about Frist's HCA holdings last year, has asked the SEC to investigate the sale.

    "If there's a trend of insider trading just as Senator Frist dumped his stock, it's a clear indication that he may have known more than the rest of the public," said Carmen Balber, a consumer advocate with the group.

    It isn't clear whether the SEC will look into the matter.

    Nashville securities attorney Gary Brown said he wouldn't be surprised if security regulators look into Frist's sales. "Any time something like that happens, you've got to at least raise the question."

    One potential explanation of the increased sales this year could be that HCA in December made 19.1 million shares tied to stock options immediately exercisable for executives and employees, even though the shares were accumulated over a period of years.

    "To the extent that options were accelerated (meaning they could be sold) that means that this year there were a greater number of options available for exercise and sale of the shares," Brown said.

    The decision by HCA came ahead of an expected change in accounting rules that would require companies to deduct the value of options from their profits. But at the time, company spokesman Jeff Prescott downplayed that connection, adding employees would have become vested in roughly half of the 19.1 million shares in early 2005 anyway, with the rest kicking in over the next three years.

    Early vesting increased opportunities for HCA executives to sell shares, LoPresti said.

    "You can't make the definitive statement that these guys knew there was trouble ahead. That would be irresponsible," LoPresti said. Still, LoPresti said that between Jan. 31 and April 7, 17 HCA insiders sold almost 1.5 million shares as the company's stock ran up above $50 a share. The stock peaked at $58.60 on June 22.

    Frist ordered his stock sold to avoid the appearance of a conflict of interest, Call, the Frist spokeswoman, said earlier this week. The senator declined to comment further yesterday.

    http://tennessean.com/apps/pbcs.dll/article?AID=/20050923/BUSINESS01/509230471/1003
     
  4. Bullypulpit
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    Bullypulpit Senior Member

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    Nah...Just your short attention span. What's to collapse...? The grand jury indicted him, so Mr. Earle obviously provided sufficient evidence to convince them to do so. The trial will sort it out, but not likely soon enought to salvage DeLay's political career. Too bad.
     
  5. archangel
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    archangel Guest

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    You remind me of the 'Oldies song' "Wolly Bully" fun to dance too...but not exactly comprehensive! :eek:
     
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