Frist Will Now Face Formal SEC Investigation

by Steve

Now it's Frist's turn. Bloomberg reports this morning that the SEC will open a formal investigation of Bill Frist's sale of his HCA stock through his supposedly blind trust back in June. This will allow the SEC to subpoena documents and compel testimony from witnesses, separate from any information provided by Frist himself.

And was it a big deal, since Frist now says with a straight face that he only dumped the stock now to avoid the appearance of a conflict of interest? Well, yes it was a big deal, given how much Frist and his family made on the sale compared to the value of those shares last week. Jamie Court tells us over at the Huffington Post that his group, the Foundation for Taxpayer and Consumer Rights estimates that Frist made between $2 million and $6 million by dumping his HCA stock when he did, rather than hold onto it and see the value go down after the bad earnings report came out.

Of course, it also doesn't help Frist that the senior management of HCA lied to investors about the financial health of the company just before the earnings report came out, yet Frist apparently had advance word that the information given to investors was bogus.