UnitedHealth settles stock scheme lawsuit for $895 million — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

UnitedHealth settles stock scheme lawsuit for $895 million

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Minnetonka-based UnitedHealth Group has agreed to pay $895 million to settle a lawsuit alleging the health insurance company gave executives backdated stocks, a compensation scheme that lined the execs’ pockets but caused losses for investors.

Former CEO William McGuire agreed to personally pay $30 million under the settlement, including a $7 million penalty, the largest penalty levied against an individual in a stock-backdating case.

All together, the settlement is believed to be the largest backdating options recovery ever to result from a class-action lawsuit. The California Public Employees’ Retirement System (CalPERS) and other institutional shareholders filed the suit.

The Securities and Exchange Commission alleged that UnitedHealth concealed $1 billion in executive compensation through the stock-backdating scheme between 1994 and 2005.

U.S. District Judge James Rosenbaum granted preliminary approval of the settlement Dec. 22, with a final approval hearing set for March 16.

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