The suspicious June trades which led to a formal SEC inquiry into possible rules violations at HCA are part of a pattern at the company, some analysts say. HCA insiders have always had a knack for good timing and understanding "when their company's stock is undervalued and when it isn't." In the late 1990s, executives at the company sold heavily as the value of the company's shares rose, notes insider trading expert Michael Painchaud. It happened again in 2001 and 2002.
The difference now is that more attention is on the company due to recent sales by Senate Majority Leader Bill Frist (R-Tenn.), whose brother Thomas is HCA's former chairman and a current director. The real issue may be changes to hospital reimbursement rates drafted by Senate Finance Committee Chairman Charles Grassley (R-Iowa) and supported by CMS, writes Melissa Davis. Analysts like David Weakley have been warning for months that if those changes go through they will turn hospital economics upside down.
- see this article from TheStreet.com