Capital Markets

HCA Subpoenaed over Frist Stock Sale

The Senate majority leader's sale came about two weeks before an earnings warning that reportedly sent HCA's stock tumbling nearly 16 percent.
Stephen TaubSeptember 23, 2005

HCA Inc. has received a subpoena that it believes concerns the sale of company stock by Senate majority leader William Frist, who is widely considered a potential candidate for president in 2008.

The nation’s largest for-profit hospital company, added that
it intends to cooperate fully with the request for documents, which reportedly was submitted by the U.S. Attorney for the Southern District of New York. The Securities and Exchange Commission is also investigating Frist’s stock sales, The Wall Street Journal reported.

HCA was founded by Frist’s father; his brother was formerly the company’s chairman and chief executive officer and currently sits on the board of directors.

Earlier this year, Frist reported holding blind trusts valued between $7 million and $35 million, reported the Associated Press. In June, when HCA was trading near its 52-week high of $58.40, the senator asked a trustee to sell all his HCA stock, according to the Associated Press. Some HCA insiders were also reportedly selling their shares at the time; insiders sold about 2.3 million shares, worth about $112 million, from January through June.

Frist’s sale came about two weeks before the company issued an earnings warning for the second quarter, which sent its stock tumbling nearly 16 percent, the wire service also reported.

SEC spokesman John Nester would neither confirm nor deny that Frist or any officer or director of HCA is the subject of an investigation, added the AP.

4 Powerful Communication Strategies for Your Next Board Meeting