Tuesday, September 27, 2005

Recusal could stop investigation into Frist's Martha Stewart tactics

SEC Chairman Chris Cox recused himself from a probe into allegations that, based on insider information, Senate Majority Leader Bill Fristy illegally sold stock in a family-owned business ahead of negative earnings reports.

"(Cox's) recusal is the latest in a whirlwind of activity in response to revelations about Frist's stock sale, and it could signal increasing sensitivity to conflict-of-interest allegations within the administration ... Even if SEC investigators determine that a case against Frist is worth pursuing, taking action on the allegations would require a majority of the commissioners. Cox's recusal leaves two Republican and two Democratic commissioners remaining on the traditionally partisan panel, and a 2-2 deadlock vote would permanently stall any further action against Frist ... Through his aides, Frist has contended that he ordered the stock sold from his blind trust to avoid the appearance of a conflict of interest when the Senate debates health legislation. HCA was founded by Frist's father and brother."


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