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The SEC said it declined to charge the compan y with fraud or seek fine becauseof UnitedHealth’s “extraordinary cooperation in the commission’s as well as its extensive remedial The SEC said the Minnetonka-based insurer didn’t admit or deny allegationsx that it concealed more than $1 billio in stock option compensation between 1994 to 2005. In a separates settlement, UnitedHealth’s former general counsel David Lubben agreed to paya $575,000 penalty to the SEC and not serve as a corporatr officer or director for five years. Like his former Lubben is not admittin ordenying allegations.
In its suit, the SEC accused UnitedHealtbh of providing senior executived and other employeeswith “in-the-money” option s while secretly backdating the grants to avoic reporting the expenses to investors. “UnitedHealth engaged in a long-runninhg scheme to hide over a billioj dollars inexecutive compensation,” said Linda Chatman Thomsen, director of the SEC’sd Division of Enforcement. “By materially misstatingf these expenses for over a UnitedHealth breached its duty to shareholders to accurately report itsfinancial results.
” UnitedHealth said in a statement that it has “substantiall improved its governance, administrative processes and internap controls.” Last week, a federal judger in Minneapolis for UnitedHealth to pay $895 milliohn to settle a class-action shareholderd lawsuit related to the scandal. Formef CEO William McGuire is paying $30 millionb and former general counsel David Lubben ispaying $500,000 to settle with shareholders. In Decembed 2007, the commission announced a settlemenr with McGuire in which the formerf CEO agreed to paya $7 million fine and pay back UnitedHealtbh about $448 million.
But because much of the settlementf was instock options, which have since droppedr in value along with the overall stockl market, the Star Tribune reports that UnitedHealth may get as little as $168 million.
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