HCA under investigation by SEC; insiders painted sunny picture as they sold off stock | VailDaily.com

HCA under investigation by SEC; insiders painted sunny picture as they sold off stock

Associated Press

WASHINGTON – The Securities and Exchange Commission is investigating HCA Inc., the hospital chain founded by Senate Majority Leader Bill Frist’s family, the company said Thursday.Federal prosecutors and the agency also are probing Frist’s sale of stock in HCA, the Nashville, Tenn.-based company that grew into the nation’s largest for-profit health care chain.HCA, founded by Frist’s father and brother, said it is cooperating.SEC spokesmen have declined comment on the investigation.Documents show that while HCA insiders were selling millions of dollars of their own stock this year, they were also painting an upbeat picture of the company’s outlook for investors.On June 14, the day after Frist, R-Tenn., ordered his shares sold, HCA officers at a Goldman Sachs health care conference in Laguna Niguel, Calif., spoke optimistically about the company’s prospects.Victor Campbell, HCA’s senior vice president of corporate communications and government relations, soothed investor concerns about unpaid patient debts and worries about patient volumes.He advocated for a still-pending Senate bill that would limit the establishment of physician-owned specialty hospitals.In the month before the speech, Campbell sold about $12 million worth of stock. It was part of a massive insider sell-off at HCA that totaled some $112 million between this January and June.Those sales were disclosed publicly through filings with the SEC.HCA shares peaked about a week later, closing at $58.40 on June 22. On July 13, they tumbled 9 percent following the company’s announcement that it would not meet earnings expectations.In his remarks, Campbell did not speculate about the company’s earnings, but spoke of a number of positive trends for the company. The only expense line the company didn’t like, he told investors, was the issue of money lost from treating uninsured patients who never paid. But he said that was improving.The speech helped feed optimism surrounding HCA stock, said Oksanna Butler, a senior health care industry analyst with Citigroup Investment Research.Campbell did not respond to requests for comment. HCA spokesman Jeff Prescott said, “I’ll let what he said at the conference speak for itself.”Frist’s staff discussed selling all remaining HCA stock in April, as well as that of his wife and children, Frist said. The sales, ordered on June 13, were completed by July 1.Frist said he sold the shares to eliminate the appearance of a conflict of interest, using only information that was publicly available. His office has said he had gotten notice of a formal investigation, which grants subpoena powers to investigators to obtain information and documents.HCA shares closed up 32 cents to $48.26 Thursday on the New York Stock Exchange.Vail, Colorado