Unitedhealth Group, Inc. (UNH) Probed By SEC
Shares in second-largest health insurer UnitedHealth Group Inc. (UNH) were down about 2% in early trade Wednesday after it became known the company had received a formal order of investigation from the Securities and Exchange Commission related to the company's stock option practices.
In spring, regulators launched a preliminary investigation into the matter. UNH CEO, Dr. William McGuire was determined to have approximately $1.5 billion of unrealized gains on stock options- many of which were granted at or near quarterly low points in the company's stock price. That company executive later resigned.
UNH's own internal review found errors in its stock options accounting that would cost up to $1.7 billion to correct. However, in October, UNH made a solid showing with its quarterly earnings, indicating that while near-term operational risk remained, the company had made some strides to get back on track.
The Securities and Exchange Commission late last week tried to cut through some of the confusion that has arisen with the way companies disclose grants of stock option awards to executives, saying on its web site that how companies disclose stock option awards will now conform more closely to U.S. Financial Accounting Standards Board guidelines. This requires recognition of the costs of equity awards over the period in which an employee works for the award.
Minnetonka, Minn.-based UNH said in a filing to the SEC that it intends to cooperate with the SEC's investigation.
--Christine Marie Nielsen, Briefing.com
In spring, regulators launched a preliminary investigation into the matter. UNH CEO, Dr. William McGuire was determined to have approximately $1.5 billion of unrealized gains on stock options- many of which were granted at or near quarterly low points in the company's stock price. That company executive later resigned.
UNH's own internal review found errors in its stock options accounting that would cost up to $1.7 billion to correct. However, in October, UNH made a solid showing with its quarterly earnings, indicating that while near-term operational risk remained, the company had made some strides to get back on track.
The Securities and Exchange Commission late last week tried to cut through some of the confusion that has arisen with the way companies disclose grants of stock option awards to executives, saying on its web site that how companies disclose stock option awards will now conform more closely to U.S. Financial Accounting Standards Board guidelines. This requires recognition of the costs of equity awards over the period in which an employee works for the award.
Minnetonka, Minn.-based UNH said in a filing to the SEC that it intends to cooperate with the SEC's investigation.
--Christine Marie Nielsen, Briefing.com
Labels: UNH, Unitedhealth Group Inc.
posted by Stock Administrator @ 11:39 PM
1 Comments:
At 4:05 PM ,
nutony said...
I never understood...how the HMO stocks behave...they are up few months down few months...but never a trend....but, on the whole they move up....i guess, just like insurance stocks...they never go out of biz..always make up by raising the premiums..and you no...we can't imagine a life style without insurance....
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