UnitedHealth gets initial OK to settle options suit for $895M

A federal judge has given preliminary approval to a deal that would allow UnitedHealth Group to pay $895 million to settle a class-action lawsuit over backdated stock options. The deal would not only require nearly a billion dollars in reparations from UnitedHealth, it would also require former CEO Bill McGuire to pay $30 million, and former general counsel David Lubben to pay $500,000.

The class action, which was led by the California Public Employees' Retirement System, has pushed UnitedHealth to make changes to its corporate governance policies, according to a recent filing with the SEC. The SEC papers don't specify what the changes are, but doubtless, closer scrutiny of stock-option issuance must be among them.

In preparation for the settlement, the health plan had already paid $895 million into a fund for CalPERS and the other plaintiffs, so this shouldn't be an additional financial drain.

To learn more about the case:
- read this Minneapolis Star-Tribune piece

Related Articles:
UnitedHealth reveals details of option back-dating settlement
UnitedHealth settles securities suit for $895M
UnitedHealth CEO ousted
UnitedHealth's McGuire gives up $400M in assets