Tenet granted suit protection by SEC

The Securities and Exchange Commission last month granted Tenet Healthcare Corp. an unusual break: The company will be given protection against shareholder lawsuits even though it is being punished for fraud.

The SEC had accused the largest publicly traded hospital chain of deceiving investors by failing to disclose a scheme to boost earnings. Tenet, which neither admitted nor denied the allegations, agreed to pay $10 million to settle. Yet the SEC waived a rule that says companies engaging in fraud lose a statutory shield that makes it harder for shareholders to sue if forecasts turn out to be wrong.

SEC Chairman Christopher Cox said the settlement "favored investors because of the significant corporate-governance changes that had occurred." These included Tenet's replacement of top executives, including its chief financial officer, "who were alleged to have been responsible for the violations four years earlier."