More stock fraud in the news

Senator sold stock before price dropped

Senate Majority Leader Bill Frist, a potential presidential candidate in 2008, sold all his stock in his family's hospital corporation about two weeks before it issued a disappointing earnings report and the price fell nearly 15 percent.

Frist held an undisclosed amount of stock in Hospital Corporation of America, based in Nashville, the nation's largest for-profit hospital chain. On June 13, he instructed the trustee managing the assets to sell his HCA shares and those of his wife and children, said Amy Call, a spokeswoman for Frist.

Frist held an undisclosed amount of stock in Hospital Corporation of America, based in Nashville, the nation's largest for-profit hospital chain. On June 13, he instructed the trustee managing the assets to sell his HCA shares and those of his wife and children, said Amy Call, a spokeswoman for Frist.

Hey, does this sound familiar to anyone else? I doubt he'll be serving any jail time, though...

The value of Frist's stock at the time of the sale was not disclosed. Earlier this year, he reported holding blind trusts valued at $7 million to $35 million.

Blind trusts are used to avoid conflicts of interest. Assets are turned over to a trustee who manages them without divulging any purchases or sales and reports only the total value and income earned to the owner.

To keep the trust blind, Frist was not allowed to know how much HCA stock he owned, Call said, but he was allowed to ask for all of it to be sold.

Frist, a surgeon first elected to the Senate in 1994, had been criticized for maintaining the holdings while dealing with legislation affecting the medical industry and managed care. Call said the Senate Select Committee on Ethics has found nothing wrong with Frist's holdings in the company in a blind trust.

"To avoid any appearance of a conflict of interest, Senator Frist went beyond what ethics requires and sold the stock," Call said.

It always demands a lot of sacrifice to make a move that will save you millions of dollars. For someone who went to medical school, he's not very keen on how this looks, even if insider trading hasn't occurred. Of course, this is the same physician (who's been in the senate for almost 12 years -- would you have him operate on you at this point? It's not like riding a bike, people -- who made a prognosis on a patient he'd never personally met, based on a few hours of videotape, so maybe he skipped a couple of lectures.

Asked why he had not done so before, she said, "I don't know that he's been worried about it in the past."

HCA -- formerly known as Columbia HCA Healthcare Corp. -- has been a top contributor to the senator's campaigns, donating $83,450 since 1989, according to the Center for Responsive Politics.