Court Ends Last Backdating Suit against UnitedHealth

A federal judge approved a $17-million settlement in a stock-drop case against UnitedHealth Group.

The judge’s signature resolved the final piece of litigation against the health-care company over its stock-option backdating practices. U.S. District Judge James M. Rosenbaum of the U.S. District Court for the District of Minnesota granted final approval to the deal last week after preliminarily giving it the OK in February, the Associated Press reported (see “Court Gives Preliminary OK to UnitedHealth $900M Options Settlement”).

Among other charges, the suit settled by the last order had included allegations the backdating practices left the company’s stock artificially inflated and that the retirement plan lost significant assets when the UnitedHealth share price declined. 

Last month, Rosenbaum approved a separate settlement resolving a derivatives case that pitted UnitedHealth shareholders against former chairman and CEO William McGuire and several other company executives.

Earlier this month, Rosenbaum also approved another class-action settlement amounting to more than $925 million. UnitedHealth will pay $895 million toward that settlement. McGuire contributed $30 million and cancelled 3.6 million stock options.

Problems with options backdating led to several lawsuits and forced McGuire to leave his post three years ago (see “UnitedHealth’s McGuire To Depart over Stock Options Scandal”).

Company spokesman Don Nathan has said UnitedHealth has already accounted for those settlements so the amounts will not affect future earnings.

“We are pleased to have resolved all these matters and are continuing to focus on serving people and helping them lead healthier lives,” he told the Associated Press.