August 16, 2007
HCA has agreed to pay $20 million to settle a group of shareholder suits that accused the company of making misleading statements in early January 2005. The suits contended the execs spoke highly of their prospects in January, but released bad news in July 2005, selling almost 1 million shares of stock in the interval. (If true, that certainly does raise some questions.)
After the lawsuits were filed, the SEC and the U.S. attorney in New York filed subpoenas to HCA and former Senator Bill Frist to determine whether insider trading took place. However, neither agency filed charges. Nonetheless, HCA settled on the civil suit, keeping larger questions of potential wrongdoing off the table. Smart move, I think.
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