Spring 2006: The Wall Street Journal writes about a number of companies, including UnitedHealth Group Inc., that may have improperly backdated stock options.
October 2006: William McGuire steps down as chief executive after an independent investigation finds stock options at the company were likely backdated, ending a 20-year career at UnitedHealth. Chief Operating Officer Stephen Hemsley takes the helm.
December 2006: The California Public Employees' Retirement System (CalPERS) files a lawsuit against UnitedHealth and former and current executives alleging securities fraud. The U.S. Securities and Exchange Commission (SEC) makes formal its probe into UnitedHealth's stock-options program.
January 2007: Former and current UnitedHealth officials agree to reprice their stock options.
March 2007: UnitedHealth restates earnings downward by $1.53 billion over the past 12 years to account for backdated options.
December 2007: McGuire and other UnitedHealth officials agree to give up a total of $900 million in stock options value -- including those previously repriced -- and other benefits to the company. McGuire also agrees to pay a record $7 million fine to the SEC. Later, a federal judge asks the Minnesota Supreme Court to what extent he can review the blockbuster deal, throwing the settlement into question.
March 2008: A federal judge grants class action status to the CalPERS lawsuit.
July 2, 2008: UnitedHealth agrees to pay $895 million to settle the CalPERS-led lawsuit. The company also agrees to pay $17 million to settle a separate class case involving the Employee Retirement Income Security Act.
UNFINISHED BUSINESS: The settlement does not include former CEO McGuire and former general counsel David Lubben. CalPERS will continue to pursue its case against the two. Also, investigations by the Justice Department, the SEC and Minnesota Attorney General Lori Swanson are continuing.
Source: Star Tribune Research
