UnitedHealth Group, Minnetonka, MN, said the Securities and Exchange Commission has launched a formal investigation into its historical stock-option granting practices. In its latest SEC filing, the nation’s second largest health insurer said it was notified of the probe on Dec. 19. The company had been the subject of an informal SEC inquiry since April, when it fell under scrutiny for allegedly manipulating the timing of stock options granted to former Chairman and Chief Executive Officer William McGuire. McGuire and a number of other top officials resigned earlier this year after an internal review concluded that many of the billions of dollars in stock options they had received since 1994 were likely backdated to maximize their value. Earlier this month, UnitedHealth announced that it might have to cut as much as $660 million off its historical earnings to correct accounting problems stemming from its former stock-options practices. UnitedHealth said in its SEC filing that it “has cooperated and will continue to cooperate” with federal investigators.
News | December 26, 2006