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FTCR: SEC Should Subpoena Senator Frist Concerning HCA Stock Sale


SANTA MONICA, Calif., Sept. 22 -- The Securities and Exchange Commission should subpoena phone records and receipts to investigate possible insider trading activities between Senator Bill Frist and his brother, HCA Director Thomas Frist, Jr, said the nonprofit, nonpartisan Foundation for Taxpayer and Consumer Rights (FTCR) in a letter to the Commission yesterday. Frist directed his trust manager to sell all of his and his immediate family’s HCA stock, valued somewhere between $10 million to $30 million, at the beginning of June just as the market value of HCA stock was peaking. The stock fell precipitously on July 13 after the announcement of poor quarterly earnings that failed to meet expectations.

“Given the close relationship between Senator Frist and Thomas Frist, it is imperative that their communications concerning the sale of Senator Frist’s HCA stock be investigated fully, including use of your subpoena power to acquire phone and financial records, board meeting minutes, and other pertinent records to verify the veracity of the assertions by the subjects of the investigation,” wrote FTCR to the SEC’s Director of Enforcement.

Read the letter to the SEC:

Thomas Frist, Jr.’s position of influence as an HCA Director qualifies him as an insider under the Securities and Exchange Act. Thomas is the largest individual shareholder in HCA, with 5.5 million shares that were worth over $263 million at the end of trading Wednesday. He has also held the positions of Chairman, President and Chief Executive Officer at the company he founded with his father, Thomas Frist, Sr.

The Foundation for Taxpayer and Consumer Rights (FTCR) filed an ethics complaint last April asking the United States Senate Ethics Committee to investigate Senator Frist for a conflict of interest in his advocacy of medical malpractice liability limits that would financially benefit HCA, which also owns the nation’s fourth largest malpractice insurer.

Read FTCR’s complaint:

Read the Ethics Committee response:

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