Thursday, September 22, 2005

"Good fortune, isn't it?"

So said John Coffee, a professor of securities law at Columbia, about Bill Frist's sale of his large block of shares in HCA. Professor Coffee was quoted in the New York Times today:
Professor Coffee said such well-timed sales in the families of top executives were a red flag of possible insider trading and often drew regulatory inquiries, although just a small fraction of such instances lead to formal investigations.
The question, Professor Coffee said, is whether Mr. Frist received private information about the company performance from his brother or other insiders.
"There is no prohibition against a family member's dumping his stock in a company, unless it can be shown that the family member was tipped as to material nonpublic information," he said. "That seems to be the missing link."


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