Posted on 09/30/2005 5:45:43 AM PDT by OESY
...The SEC is investigating Mr. Frist for unloading his shares of hospital chain HCA prior to a July earnings warning. Democrats are suggesting that an HCA insider gave Mr. Frist a call to tip him off. Mr. Frist denies it, and to date there is zero evidence... to support the allegation. And nothing in Mr. Frist's past or character suggests he's the kind of politician who'd try to scam the system....
The real issue here is the modern demand that politicians abandon all acquaintance with the world of commerce when they take office, lest they have a "conflict of interest." It looks to us as if Mr. Frist's good-faith attempt to comply with this demand is what has landed him in the headlines. A well-paid surgeon before he ran for the Senate in 1994, Mr. Frist also owned stock in HCA, a company his family helped to found. In an attempt to insulate himself from criticism, Senator Frist and his family put some $10 million of HCA stock into what are known as "blind trusts."...
Mr. Frist has said he first requested legal advice about selling his HCA stock in April to avoid any hint of future conflicts, and received Ethics Committee approval. If he did indeed ask for advice in April, this would have been before even HCA would have forseen earnings trouble. April would also have been a smart time to sell, with the company's stock up 40% for the year.
The irony is that Mr. Frist was never required either to establish a blind trust or to sell his shares. In both cases he did so to insulate himself from the appearance of any conflict. Instead, in doing both he has only made himself a bigger target for those who'd suggest he has something to hide....
(Excerpt) Read more at online.wsj.com ...
I don't agree with the WSJ this time. That's not the issue. The issue is whether Frist used insider info. He says he did not, but it sure does stink that he bailed out just before a bad profit report, and now claims that he did it to avoid the appearance of a conflict. Seems like he's had that problem for years, yet just before the stock goes South, he decides to act on it.
Personally, I don't believe his claim that he did not have insider info.
Frist and Delay are both under fire for not doing anything illegal. :-)
Except the stock went up a bit right after he sold. So much for that theory.
Frist sold on June 13 probably in the $54 - $55 range. It's now at $48.26. What's that an 11% drop. It's not like it plummeted to $10 per share.
Do you have some "insider" facts on this case that the news media and the rest of us don't have - in order to make such a claim???
Bush sold stock which went down, then went up above what he sold it for, before going bust. And people complained about that.Stocks are always going to either go up or go down; they never stay the same for any length of time. Now if it was Enron, and he sold it just before the bottom fell out, that would be one thing. But for Frist to sell before a 10% drop just isn't that big a deal.
Not that I wouldn't like to have the difference myself, but . . .
So what if it went up a few cents after he sold? It went down when the news was released. The truth is that this has nothing to do with whether the price went up or down. The truth is that it has to do with whether he acted on inside info. The facts seem pretty bad for him, particularly since other members of his family sold at the same time. I wonder--were THEY worried about the perception of a conflict? How could they be? They aren't in the Senate.
The article clearly said that Frist inquired in April WHEN THE STOCK WAS AT ITS HIGHEST.
His decision was basic stock market common sense. He was selling when it was high.
Of course it would go down....odds are anyway, when you look at the history of the stock. And remember, Frist is a member of the family that shared in starting HCA.....he knows the history of the stock. He can't help that.
But your average investor doesn't know that the stock is at its highest until after it goes down. I would not be surprised if Frist did know, though. That's the issue here. Of course, if he did not, then he's off the hook, but so far, the facts don't look good.
He could have avoided all this by selling before he became a Senator. Of course, he probably rationalized holding onto it since it was "his family's business." All very fine until you unload it just before a bad earnings report.
"Honest" Bill Frist never mentions this.
Yep lets let the RATS smear this man also, we are just sitting back letting the RATS do whatever they want...when are we going to start to smear back???
Why don't we start with 'dirty' harry? or how about getting Kennedy out of the senate, or how about clinton, she has enough to last a lifetime...come on pubbies, roll up your sleeves and start to smear back!!!
Anyone can know when a stock is at its highest. You just look at the graph. Also, I repeat, HCA is his family's business. OF COURSE He knew when it was at his highest.
Is there some kind of virtue in his selling at its lowest???
He had made a decision to sell it because it was a PR headache. The stock was at a high, so he sold it.
I listen to Jim Cramer's Real Money pretty regularly on the radio. He has made a fortune out of learning to buy low and sell high. It's not rocket science.
But if it is true that he asked for permission from the Ethics committee to sell in April, then the question is WHEN did they give him permission. If he sold shortly after getting permission, then there is a rational timeline which is separate from any information he might have received.
If he asked to sell in April, and the told him it was OK in June, and then he sold, it isn't really HIS fault that the sale took place in June rather than April.
It would help if Frist would clearly explain why, in April, he decided to seek this permission. I'm guessing it is because the Democrats were sending out fundraising letters calling Frist corrupt because he was dealing with Health Care in the Senate while owning the stocks.
Or, and I haven't read this -- maybe republicans are about to try to make major changes in something related to health care, and Frist decided it would be safer not to have the stock when they pushed the issue?
You obviously haven't done much investing. You can look at the graph AFTER THE GRAPH IS WRITTEN SHOWING A DECLINE. And that doesn't happen until after the stock goes down.
You should try following Cramer's advice, and see if you get rich as a consequence. It's not as easy as you might think. I've been investing for more than 25 years. I've made some money, but not because I looked at some graph and knew exactly when to buy and sell. There's a lot of guesswork in it. And curiously enough, you make more money by ignoring people like Cramer. What you hope is that you buy a stock that Cramer is not recommending, and then right after you buy it, Cramer recommends it so that everyone is buying it, and driving up the price. That's when I sell. But that is purely luck.
What galls me the most, though, is when other investors who've got inside info use it to make a profit or cut their losses at my expense.
If he petitioned in April, that helps his case, I guess, but he's going to have a lot of 'splaining to do. If things we're looking good in April either, then that doesn't help much.
From the article: with the company's stock up 40% for the year.
It says "for the year." An annual high is not hard to determine.
That logic might help his case. If he'd really been smart, though, he'd have waited until the earnings report was released, and then he'd have sold, or better yet, he'd have sold before he got into the Senate.
I'm getting the impression that Frist's greatest expertise is as a doctor, not a politician.
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