America

No charges against Frist in stock sale

(AP)
Updated: 2007-04-27 17:07

WASHINGTON - The Securities and Exchange Commission has decided not to file insider-trading charges against former Senate Majority Leader Bill Frist in connection with the sales of stock in the hospital chain his family owns, The Washington Post reported Friday.

An 18-month investigation by the SEC staff and the US attorney in the Southern District of New York ended without action against the Tennessee Republican, the Post reported.

Frist had a formal interview with Justice Department and SEC lawyers to address the stock sales in late January, the Post reported, citing unidentified sources.

In a statement, Frist said he had "acted properly" and that his only reason for selling HCA Inc. stock in his trust accounts was to "eliminate the appearance of a conflict of interest."

Frist spokesman Matt Lehigh said the doctor would not comment beyond the statement.

The sales came in 2005 as Frist was weighing whether to run for the Republican nomination for president, which he eventually decided against. When the sales came to light, he denied having any insider information about HCA.

"I've always conducted myself according to the highest ethical standards in both my personal and public life, and my family and I are pleased that this matter has been resolved," he said in the statement.

Federal officials in September 2005 opened the investigation into Frist's sales of all his stock in HCA, the Nashville, Tenn.-based company his father and brother founded. The sales were completed by July 1, 2005, two weeks before share prices fell 9 percent.

HCA insiders were selling off shares as early as January 2005, with the largest sales taking place in April, May and June of that year. The insider sell-off totaled about 2.3 million shares worth at least $112 million.

Frist had held HCA stock in a blind trust with approval of the Senate Ethics Committee and contended that he had no idea of its value or that of any of his stock holdings. Documents filed with the Senate showed that Frist was often updated by trustees about changes to his trusts, including the addition and sale of HCA stock. He also had HCA shares in other trusts.