UnitedHealth Faces Formal Probe
By a WALL STREET JOURNAL Staff Reporter
Wednesday, December 27, 2006
UnitedHealth Group Inc.
said the Securities and Exchange Commission has launched a
formal investigation into its stock-options practices.
The Minnetonka, Minn., health insurer had been the subject
of an informal SEC inquiry since April.
"The company has cooperated and will continue to cooperate
with the SEC," UnitedHealth said in an SEC filing.
The company has delayed financial reports while it reviews
its stock-options practices, which have led to an internal
probe, a management shake-up and a restatement of financial
results. UnitedHealth has said that using current
accounting practices, the pretax charges for stock-based
compensation expense are likely to range from $400 million
to $600 million for the period 1994-2005, as well as from
$25 million to $60 million for 2006.
The company has said it has substantially completed its
analysis of the adjustments made to its financial statements
and has asked for consultation on certain interpretive
issues with the SEC's top accounting official. UnitedHealth
said it will review these issues with SEC staff before
completing its restatement of historical financial
statements and filing quarterly reports for the quarters
ended June 30 and Sept. 30, 2006.
UnitedHealth is one of the largest companies to be ensnared
in the options-backdating scandal, in which companies
manipulated the dates that options were awarded to provide
additional compensation to executives. More than 130
companies have come under scrutiny by the SEC, and many of
those are being investigated by the Justice Department.