The Securities and Exchange Commission has opened an informal file to monitor trading in Tenet Healthcare Corp.'s stock but has not launched a formal investigation into the company, Tenet revealed last week.
In a letter to shareholders, Tenet Chairman and Chief Executive Officer Jeffrey Barbakow said officials from the SEC's Pacific regional office and Tenet met earlier this month to discuss the high volume of trading in the Santa Barbara, Calif.-based company's shares in recent weeks.
The letter to shareholders provided more information on the company's recent troubles. Tenet has been reeling from the disclosure that its hospitals receive extraordinarily high payments under Medicare's outlier provision.
Its stock rallied slightly last week after losing about two-thirds of its value since a stock analyst's report on Oct. 28 questioned the sustainability of its earnings.
Also, the Joint Commission on Accreditation of Healthcare Organizations is reviewing the "quality of systems and processes" at Tenet hospitals, the letter said.
Tenet said it already had launched its own review and plans to work with the JCAHO.
Barbakow also wrote that David Dennis, chief corporate officer and chief financial officer, and Thomas Mackey, chief operating officer, left the company solely because Barbakow "had lost confidence" in them, not because they were connected to any "deeper problem than what we had disclosed."