I don’t usually blog about current events and political issues, but that is all changing today. As I read the news this morning, I discovered that Senate Majority Leader Bill Frist, a Tennessee Republican, has been subpoenaed to turn over personal records in an investigation into insider trading. He sold his stock in HCA, Inc. (founded by Frist’s father and brother) only days before it plummeted in July.
This story pisses me off for several reasons. First of all, Frist’s own family founded HCA. Families talk. That’s what they do! I’m sure that Bill had some inkling of the financial outlook of HCA. But why does the SEC just assume that he was tipped off? It doesn’t take a rocket scientist to look at his own family’s business ventures and make an educated guess as to the financial outlook of the company.
Secondly, what’s the big deal about it anyway? Have you ever accepted a favor from someone? Or given a favor to someone? Everybody does it! If you’re a service provider, maybe you give discounted services to your friends. If you work in Human Resources, maybe you help your friends get good jobs. If you’re a stripper, maybe you give free lap dances to your best customers. It’s all the same, folks! If you knew that a stock was about to drop, and your friends owned a shitload of it, wouldn’t you want to tell them to sell before they met with financial ruin?
And you’d better believe that if someone told me my stock was about to go bust, I’d sell! Does that make me a criminal? I don’t think so, but I guess I’d be getting a subpoena from the SEC - just like Bill Frist. Maybe we’d even reside on the same cell block!
Bill Frist is (or WAS) one of the top prospects for 2008 presidential candidacy. Whether or not he actually participated in insider trading, his future in politics may very well come to an end because of some political bullshit. And I have only one thing to say to that. The Securities and Exchange Commission can kiss my white ass!
October 13th, 2005 at 5:40 pm
i want a stripper friend who gives free lapdances!
ill have to get the specifics of this case before forming an oppinion. seems worth looing into at least on SEC’s behalf. maybe he did nothing illegal/immoral but you gotta at least ask.
October 13th, 2005 at 6:08 pm
I think after what happened with Enron and Worldcom, the SEC is on high alert, and with good reason. I agree with you about the obviousness that family members talk. However, if his family are in cohoots to screw investors and cook their books, then there’s reason to look into it at least. Don’t worry, Bush got arrested for a dui and he became president, so an SEC inquiry prob won’t hurt Frist’s image, if anything it might strengthen him as being the victim of partisan attacks to discredit him as a strong candidate for the Presidency. Honestly, if McCain and Giuliani run together, nobody else has a chance at getting the GOP nomination.
October 14th, 2005 at 1:27 am
it’s still not fair to all the others that don’t have insider info, in my opinion.
if I were the one about to lose my ass and I knew it, though, I might do the same thing
October 14th, 2005 at 8:36 am
The stock exchange is a very fragile balance. Most of what drives the prices are investor beliefs. Part of the balance is that all investors are equal - insider trading undermines that.
If the SEC wants to look at your books, then they should get to look with no questions asked. If he dumped the stock knowing insider information, even if he worked for the company he wouldn’t be safe.
I know this may look to someone as not a big deal, but if it’s not dealt with it will happen more often, and this will lead to an unbalanced market and worst case a crash.
One of the great things that has happened over recent years is more “average” people are holding stock - and average people tend not to make rash/quick stock moves. The effects of the 1999 “bubble burst” would have been a lot worse if a high number of average people didn’t stay invested. We do not want to undermine the average investor into thinking they sit on the outside and don’t get to play in the “real” game.
Bottom line; Bill knew the laws. If you agree with the law or not is another matter - if Bill acted on insider information he knew what he was doing was wrong. That, to me, is worse than actually breaking the law - a senator thinking he is above the law.
It would be nice if the SEC finds no wrong doing, but I see that as highly unlikely.