Having handled a number of insider trading cases, and being a fan of a trading strategy that involves following insiders, the Frist and HCA story is interesting to me, and I did some research.
There may be a different story here.
First, Frist. He should be able to make a compelling argument that his sales were based on public information - the sales by insiders in late May, early June. If his version of the events at his web site is correct, he sought approval to direct the sale in April, received the approval sometime in April, and sent the letter directing the sale in "mid-June." The sell off by insiders was in early June.
Watching insiders is an accepted investment strategy, one that I employ myself. Having been a securities attorney and stock market afficiando for over 20 years, I know that insiders know more than I know. I also know that watching what insiders do with their own money can give significant insight into the prospects for a company.
Reading between the lines, and looking at the trading, it appears that this is exactly what he did. Tigerhawk
has a pretty good analysis of the timing of the trades.
Some have called the insider sells "shovelling stock out the door" and a massive selloff, but that is not truly the case. Those sales were not pure sells, they were option excerises. Pretty routine stuff. You get an option with a strike price of $26, you wait a few years, the stock goes up to $55, you excerise the option, sell the stock, and pocket a $29 a share profit. No problem, perfectly legal.
But the question becomes why did all of those insiders decide to excerise their options in the first week of June? Most of their options were good for another 2 years. Obviously I don't know why they excerised during those days, but I am sure that the SEC and the DOJ are asking that question. Why then? What happened, and what did they know about the upcoming quarterly earnings report?