Will Bill Frist be jailed ala Martha Stewart?

So what exactly do you think he did wrong here. By posting this with the title you chose, I assume you believe he has done something illegal, but since you chose not to comment on the article you posted, I am not sure what you really think.

But, just for kicks, I'll answer the question posed in your title. The answer: It depends on whether or not there is proof he violiated laws such as was proven Martha Stewart had. The article does not seem to say he did, so I will suppose he did not.

Coastal Rats


Did you read the paragraphs I placed in bold? Sounds to me to be identical to what Martha Stewart did with her stock sale. Martha lied about her actions. So far Frist hasn't been questioned about insider stock trading. Will he also lie or will he tell the truth?

BBB
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washingtonpost.com
Frist Stock Sale Raises Questions on Timing
By R. Jeffrey Smith and Jeffrey H. Birnbaum
Washington Post Staff Writers
Thursday, September 22, 2005; A10

Senate Majority Leader Bill Frist (R-Tenn.) has maintained for years that his stock holdings in the nation's largest for-profit hospital chain posed no conflict of interest for a policymaker deeply involved in health care matters. He even received two rulings in the 1990s from the Senate ethics committee that blessed the holding of the stock in blind trusts.

So when Frist decided in June to dump all the stock, and later cited as the reason his desire to avoid the appearance of a conflict of interest, eyebrows went up among ethics experts and congressional watchdogs. Why did he do it at that time?

Precisely a month later, after the stock was sold, its price tumbled 9 percent when executives in the company -- HCA Inc., which was founded by Frist's father and on whose board Frist's brother serves -- disclosed that hospital admissions of insured patients were lower than expected, depressing profits in the second quarter.

The timing thus raised questions about whether Frist had somehow traded on information he obtained in advance from the company. "Frist has been in the Senate for many years now, and the conflict is not new," said Melanie Sloan, executive director of the watchdog group, Citizens for Responsibility and Ethics in Washington. "Why did he decide to sell it then? Why not years ago? What's changed? Did he know that the stock was about to take a fall?"

Frist spokeswoman Amy Call said yesterday that Frist "did not have any conversations with HCA executives about HCA stock when he was making the decision to divest." Asked more generally whether he had discussed the company's performance with its executives, she replied, "No."

She said Frist's decision was based "purely on wanting to avoid any future appearances of conflict" while pursuing new health initiatives, and said he had no way of knowing -- under the rules of the blind trusts -- how quickly the stock would be sold. Call promised to provide recent examples of criticism directed at Frist's stock holdings, but all those she eventually cited occurred before May 2004.

Until the sale, Frist's holdings in HCA formed a significant source of his wealth. His political career was launched in part by a loan secured by the stock; in 1994, he valued his holdings at $13 million, and the following year he placed them in a blind trust. In 2000, he transferred the HCA stock into a new blind trust, a transaction that could have given him insight into its value.

Frist's signed financial disclosure statements indicate that the overall value of his blind trusts did not substantially change from 2003 to 2004. As one of the Senate's multimillionaires, Frist has other non-HCA-stock holdings outside of the trusts.

Several ethics experts and watchdogs said they found it odd that Frist could intervene to order such a sale when the HCA stock was ostensibly out of his reach in blind trusts. Fred Wertheimer, president of Democracy 21, said, "The notion that you have a blind trust but you can tell your trustee when to sell stock in it just doesn't make any sense. It means you have a seeing eye trust and not a blind trust. It's ridiculous."

Larry Noble, executive director of the nonpartisan Center for Responsive Politics, agreed that the arrangement "seems to defeat the purpose of a blind trust. Somebody else is supposed to have control over it to avoid potential conflicts of interest. If you can just reach in and sell stock, it seems it defeats the whole purpose."

A sample agreement for blind trusts published by the Senate ethics committee staff on its Web site states that there should be no "direct or indirect communication" between senators and trustees unless the senator is directing the trustee "to sell all of an asset . . . [which] creates a conflict of interest or the appearance thereof due to the subsequent assumption of duties" by the senator.

Jan W. Baran, a Republican ethics expert at Wiley Rein & Fielding LLP, said, "That's the question, 'What changed?' " to compel Frist to sell his stock when he did.

According to Senate ethics rules, Baran said, Frist "can tell somebody to dispose of all of an asset that was initially placed into the blind trust. As a matter of Senate ethics rules, he is in compliance. The question that remains is, why did he sell the stock at that time? What conflicts arose in June that did not exist beforehand?"

"For the Securities and Exchange Commission," Baran added, "the answer is probably very important."

According to Thomson Financial, a reporting service, seven senior HCA executives sold 574,882 shares worth $19,942,610 between May 17 and June 10. A company spokesman, Jeff Prescott, said the executives are entitled "like other stockholders [to] make personal decisions . . . about when to sell." He said the executives complied with "blackout restrictions" imposed by the SEC to prevent dealing within a certain period prior to restatements of earnings.

An SEC spokesman said it is the commission's policy not to comment on investigations, and would neither confirm nor deny that it is probing insider trading at HCA.
-------------------------------------

Researcher Richard Drezen, in New York, contributed to this report.

Yes, I read the bold print. And no, it does not yet sound like what Martha S. did. The fact that he sold stock then subsequently went down in price is not in any way evidence that what he did was illegal. In fact, your bold print seems to say that everything was in fact on the up and up.

Your statement, "Will he also lie or will he tell the truth?" says everything we need to know about your view. You are predisposed to believe that what he did was illegal, thus if he does not admit to insider trading (telling the truth in your view) then he is lying.

If he is investigated and there is evidence of insider trading, then I would hope he is charged and prosecuted. If found guilty, he should receive the sentence that the law allows for his crime. But until then, you are simply making this an issue because he is a republican and you happen to be very much opposed to this admin.

I understand completely. :wink:

While there isn't hard evidence presented yet, it certainly is suggestive that he knew something was up when the sold the stock. Quite suspicious. And pardon us if we don't consider Frist to be a paragon of virtue.

Insider trading is a serious crime...

Cycloptichorn

Agreed Cy. It is serious. But people trade stock every day and then see that stock go down shortly afterwards. The fact that it happened in this case is not indicative of any wrong-doing in and of itself.

Martha was actually convicted of obstruction of justice or evidence tampering, wasn't she? (Just being pedantic here, I don't really have a beef with anything said so far.....)

True, but the fact that his family ran/owned the company doesn't help matters much, does it?

I mean, it seems as if there was quite the possibility of insider trading info being passed around the family; much like the Stewart case, actually!

Cycloptichorn

Absolutely Cy, the possibility does exist. But BBB is ASSUMING guilt and ASSUMING that if he is questioned and he denies any illegality, then he is lying. And she is doing so for one reason. He is a republican and she does not agree with republican ideas and thus is more than willing to think the worst. Otherwise, why even bring up this piece of non-news? It is pointless unless and until there is some basis to the accuasation.

Which is fine if she likes going about thinking that way. Just don't try to get everyone else to buy that sack of goods until there is something in the sack worth buying. :wink:

I dunno. I think there are plenty of republicans who could claim they were innocent, and based upon their charcter and past experiences they've had, I wouldn't assume they are lying.

I think BBB probably does for the same reason that I am tempted to; not because it is a Republican, but because it is Bill Frist, a lying scumbag of a man no matter which party he is affiliated with.

Still, I will withold my judgement for now of his guilt or innocence on this issue. My personal beliefs about his charcter do not a guilty man make, for sure...

Cycloptichorn

Cycloptichorn


You are so smart.

BBB

HCA subpoenaed over Sen. Frist's shares
HCA subpoenaed over Sen. Frist's shares
By Jeremy Pelofsky
Fri Sep 23,11:21 AM ET

A federal investigation into Senate Majority Leader Bill Frist's sale of HCA Inc. stock widened on Friday when the largest U.S. hospital chain said federal prosecutors had subpoenaed the company for related documents.

Frist, a Tennessee Republican and a potential 2008 presidential candidate, has come under fire for sale of his stock in the company shortly before HCA warned that earnings would miss expectations.

The sale has also drawn the attention of the Securities and Exchange Commission, which has sought information from Frist. His spokesman has denied Frist had any inside information when he initiated the sale.

The lawmaker on June 13 requested the sale of all of his remaining stock in HCA, which was held in blind trusts, his spokeswoman Amy Call said. By July 8 the shares held for himself, his wife, and children were sold by trustees, the spokeswoman added.

Frist had no control over the timing of the sale, the spokeswoman said.

On July 13, HCA warned that second-quarter operating earnings were likely to fall short of analysts estimates, sending its shares tumbling 8.85 percent.

HCA, which Frist's father and brother helped found, said in brief statement that it had received a subpoena from the U.S. Attorney for the Southern District of New York for the production of documents.

"The company believes the subpoena relates to the sale of HCA stock by Senator William H. Frist," HCA said, adding that it would fully cooperate with the matter.

A spokesman for the SEC, which routinely investigates potentially suspicious stock trades before major company news, declined comment.

"Senator Frist had no information about the company or its performance that was not available to the public when he directed the trustees to sell the HCA stock," Frist spokesman Bob Stevenson said in a statement issued on Thursday.

"His only objective in selling the stock was to eliminate the appearance of a conflict of interest," Stevenson said. "The majority leader will provide the SEC any information that it needs with respect to this matter."

HCA and other hospital operators have been hurt by high levels of unpaid patient bills and lackluster admissions.

Shares of HCA were up 84 cents, or 1.8 percent, to $46.74 in morning trading on the New York Stock Exchange.
---------------------------------------------

(Additional reporting by Julie Steenhuysen in Chicago)

BBB
Any presidential candidate who thought he could get away with insider trading is either to stupid or to arrogant to be presidental material---unless he is a Republican. They think they are part of the entitlement class.

BBB

These two statements seem contradictory. If Frist told them to sell the shares, he certainly didn't expect them to hold onto them for any length of time. The interesting thing is that the request was one month before the news was scheduled to come out. Frist couldn't direct exact date to sell but I am guessing a month would be the reasonable time frame to execute the order.

Lots of reason for the SEC to investigate this. Why was it suddenly imperative for Frist to eliminate his holdings? He had been in the Senate since 1994 and Majority leader since 2002. That seems a LONG time to not worry about conflict of interest. Why was the conflict only a concern one month before the stock was to deliver bad earnings information. The reasoning sounds fishy.

I titled this thread about Frist and Martha Stewart, which probably isn't correct. Frist's insider trading is closer to Stewart's doctor friend, Samuel Waksol, who owned the company and is serving a long term for insider trading and other crimes.

http://www.cbsnews.com/stories/2003/10/02/60minutes/main576328.shtml

BBB

SEC chief recuses self from Frist stock probe
SEC chief recuses self from Frist stock probe
Yahoo news 9/26/05

Christopher Cox, chairman of the U.S. Securities and Exchange Commission, said on Monday he has recused himself from an SEC probe of sales of stock in hospital company HCA Inc. by Senate Majority Leader Bill Frist, a former congressional colleague of Cox.

"The staff of the Securities and Exchange Commission have commenced a review of sales of HCA stock by a blind trust established by the U.S. Senate Majority Leader," Cox said in a statement.

"Because of my service in the congressional leadership for the last 10 years, I have recused myself in this matter," he said.

Cox's campaign committee donated $1,000 to Frist's 2000 re-election campaign, according to Federal Election Commission records made available by PoliticalMoneyLine, a non-partisan group that tracks money in politics.

"The purpose of the recusal is to avoid any appearance of impropriety in the commission's consideration of this case," said Cox, whose statement did not mention the 2000 donation.

Cox was a long-time Republican congressman from Southern California before being named this summer by President George W. Bush as head of the investor protection agency. Frist is considered a potential 2008 presidential candidate.

Frist's office said last week the SEC had contacted the Tennessee Republican for information about his decision to sell his stock in HCA -- held in blind trust -- a month before the company issued a warning that its operating profits were likely to fall short of Wall Street expectations.

HCA said last week the U.S. Attorney for the Southern District of New York had issued a subpoena to the company seeking information it believed was related to the stock sales, and that the SEC had requested the same information.

Frist spokesman Bob Stevenson has said the Senate leader had no inside information when he initiated the stock sale and that his objective was to eliminate any appearance of a conflict of interest.

Stock sale may be costly for Frist
washingtonpost.com
Stock sale may be costly for Frist
By Thomas Ferraro
Reuters
Tuesday, September 27, 2005; 3:18 PM

WASHINGTON (Reuters) - Senate Majority Leader Bill Frist's recent stock sale threatens to cost him and fellow Republicans politically as he mulls a 2008 presidential bid and investigators examine whether he violated any trading laws, political analysts said.

"Frist's White House campaign hasn't really taken off, and this adds weight to an idling plane," said Larry Sabato, a political science professor at the University of Virginia.

"He may prove to be totally innocent, but this is a negative -- a big distraction -- for his presidential ambitions and management of the Senate," said Ethan Siegal of the Washington Exchange, a firm that tracks politics and legislation on Capitol Hill for institutional investors.

Frist has been put on the defensive by a disclosure last week that federal investigators are examining the senator's June 13 request for a trustee to sell all of his remaining stock in HCA Inc., a Nashville-based hospital company founded by members of his family.

On July 13, days after the Frist stock sales were completed, HCA warned that second-quarter operating earnings were likely to fall short of analysts estimates, sending its shares tumbling 9 percent. Frist has denied any wrongdoing.

But it has given Democrats fresh ammunition to bolster their claim, one they plan to make in next year's congressional elections, that Republican lawmakers are ethically challenged.

Such partisan fire has been previously aimed mostly at House of Representatives Majority Leader Tom DeLay, a Texas Republican admonished on three separate matters last year by the House Ethics Committee.

At a news conference on Monday, Frist, a wealthy surgeon and influential force in Congress on health care issues, said he had no inside information about the stock and sold the shares in the hospital company merely to avoid the appearance of a possible conflict of interest.

BEGAN SALE MONTHS AGO

Frist said he began moving to sell the stock held in a trust about three months before its value dropped. He said he acted with the approval of the Senate Ethics Committee, and will now cooperate with investigators from the Justice Department and Securities and Exchange Commission.

"And now I'm going back to work," Frist told reporters, declining to take any questions.

Senate Majority Whip Mitch McConnell, a Kentucky Republican, rose to Frist's defense on Tuesday, calling him in a Senate speech "one of the most gifted, hard-working and honest people I have ever met."

Afterward, McConnell told reporters: "He enjoys full support in our (55-member Senate Republican) caucus."

At the Senate Republicans' weekly closed-door meeting on Tuesday, Frist, who was first elected to the Senate in 1994 and rose to leader eight years later, again defended himself and took questions from colleagues, lawmakers said.

Sen. Judd Gregg, a New Hampshire Republican, said, "Bill Frist is an extraordinarily ethical individual and we're lucky to have him in the Senate."

A Senate Democrat, speaking on the condition of anonymity, said: "This doesn't help Bill Frist. It just looks bad. We'll see what happens."

Pollster John Zogby, who conducted a survey in June that found Frist far behind several possible Republican presidential contenders, including Sen. John McCain of Arizona and former New York Mayor Rudolph Giuliani, said, "For a fledgling presidential campaign, this isn't the best kickoff."

Frist is to go to Iowa, site of the initial 2008 party-nominating presidential contest, on October 22 to address a Republican dinner.

Stuart Rothenberg of the nonpartisan Rothenberg Political Report, which tracks presidential contests, said the stock sale may hurt Frist, but until the investigation is completed its premature to predict how much.

Rothenberg said: "Frist has bigger (political) problems -- lack of a Republican message, difficulty dealing with the House and weakness as a presidential contender. He isn't one of the party's better speakers, and has difficulty exciting people."

(Additional reporting by Richard Cowan)