SEC chairman withdraws from investigation of senator's stock sale - WMC Action News 5 - Memphis, Tennessee

SEC chairman withdraws from investigation of senator's stock sale

The new chairman of the Securities and Exchange Commission, Christopher Cox, said Monday that to avoid a potential conflict he will not participate in the agency's investigation of the sale of HCA Inc. stock by Senate Majority Leader Bill Frist.

Cox, who was in Congress for 16 years as a California Republican and left the House to assume the SEC job last month, had been a member of the GOP leadership in Congress for the past 10 years.

"Because of my service in the congressional leadership for the last 10 years, I have recused myself in this matter," Cox said in a statement. "The purpose of the recusal is to avoid any appearance of impropriety in the (SEC's) consideration of this case."

Cox's statement was the first public acknowledgment by the SEC that it is investigating Frist's sale of stock in HCA, the big hospital operating company founded by his family.

Frist's sale of the stock from several blind trusts this summer came about two weeks before the company issued a disappointing earnings forecast that drove its share price down almost 16 percent by mid-July.

On Friday, the Nashville, Tenn.-based HCA said it had received a subpoena from federal prosecutors asking for documents the company believes are related to Frist's sale of company stock. Frist's office said that prosecutors and SEC investigators had contacted the senator's office about the sale.

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