The UnitedHealth Group said it would review its policies on stock-option grants for executives in light of an SEC investigation. The news follows a Wall Street Journal article last month that publicly questioned the company's methods of awarding options, after a computer analysis showed that chief executive Dr. Bill McGuire made substantial sums from a series of well-timed grants over a ten year period. McGuire was one of six executives the newspaper included in the analysis of option-grant patterns at top corporations. In each case, the paper noted a suspicious pattern of "regularly dated just prior to substantial run-ups in share price, often after steep declines." The transactions may raise "false disclosures and other accounting issues." Insurer stocks are down today in response. United Health Group has fallen 6 percent since Friday.
- see this article from The Wall Street Journal (sub. req)