With one GOP Congressional leader on the legal ropes, the suspicions around the Senate Majority Leader, the good Dr. Frist, deserve a closer look. It just so happens that a leading blogger on the right is also a UCLA law professor specializing in corporate law, Stephen Bainbridge:
If some SEC enforcement lawyer in fact were to start looking into this, the first question will be whether Frist had material nonpublic information about HCA at the time he ordered the sale. If he had the common sense God gave gravel, the answer to that will be a resounding no. For somebody in his position to retain access to such information would exacerbate the inherent conflict of interest that arises when he deals with health care issues, as well as potentially exposing him to insider trading liability.
Bainbridge goes on to explain, from his law book on the subject, that in light of the case law and the SEC rule, if Frist can convince a court that he was trading to clear a conflict of interest even if he possessed insider info, he’s free and clear.