Top Lawyer Bailed Before Tenet Tanked

In early 2001, about halfway through a muscular rally that took Tenet (THC Quote) stock to $50, a top corporate executive -- charged with keeping Tenet in line -- began cutting her stake in the company.

Lead counsel Christi Sulzbach, who then doubled as Tenet's chief compliance officer, raked in $7.25 million through option transactions at a time when the company's prospects had never looked better. HCA (HCA Quote), Tenet's larger peer, was embroiled in a massive fraud investigation and had long replaced Tenet as the black sheep of the industry. Meanwhile, Tenet -- slammed years earlier with fraud charges of its own -- had managed to reinvent itself as the ethical hospital chain that could behave itself and still dazzle Wall Street.

The company's profits, quietly boosted by aggressive Medicare billing, kept setting records. And the stock kept rocketing, allowing former CEO Jeffrey Barbakow to collect $111 million in a notorious insider sale just nine months after Sulzbach cashed in. ...