Senate Majority Leader Bill Frist sold all shares in the company founded by his father at a time when company leaders were selling off $112 million of the stock -- right before dropped precipitously due to poor earnings. Now, as the AP's Larry Margasak reports, Frist has come out on record and stated that he did not engage in insider trading.

Senate Majority Leader Bill Frist said Monday he had no insider information when he sold stock this summer in HCA Inc., the hospital company founded by his father and brother. The Justice Department and Securities and Exchange Commission are looking into the sales.

[...]

Questions have been raised about whether Frist had special information before the sale because insiders in HCA also sold stock during the first half of the year — and the stock price dipped soon after Frist sold his stock.

"I had no information about HCA or its performance that was not publicly available when I directed the trustees to sell the stock," Frist said, referring to the sale by administrators of his blind trusts.

Frist, R-Tenn., said his only objective in divesting his blind trusts of the stock was to avoid any appearance of a conflict of interest. Some critics have contended for years that Frist's holdings led to conflicts with his positions on health care legislation.

[...]

Frist has hired two private attorneys who specialize in securities litigation and insider trading cases: William McLucas, a former SEC enforcement director, and Harry Weiss, a former SEC attorney who was a co-author of a text titled "Preventing Insider Trading." Their representation of Frist was confirmed by their law firm, Wilmer Cutler Pickering Hale and Dorr. The involvement of the firm was first reported in Monday's editions of The Wall Street Journal.

Even if it turns out that Frist's trades were completely above board -- and there's no reason to believe this isn't the case -- this lingering story is surely a drag on Frist's already faltering bid for the 2008 GOP presidential nomination. It's unclear whether he'll be able to overcome this one.