Did UnitedHealth Execs Break Security Laws? Company Faces Scrutiny Over Stock Sales Amid Antitrust Probe

UnitedHealth Group Inc UNH Chairman Stephen Hemsley and three senior executives reportedly garnered $101.5 million from stock sales during the months leading up to the public revelation of a federal antitrust investigation. 

The cyberattack on UnitedHealth’s Change Healthcare subsidiary has also contributed to stock concerns. This attack disrupted critical data and payment systems, impacting the healthcare industry. 

The sales occurred between mid-October, shortly after the company allegedly received notice of the Justice Department probe, and late February, just before media reports surfaced about the investigation. 

The company’s stock experienced a decline following the widespread coverage of the investigation.

There is speculation regarding these trades’ timing and approval process, as there are no indications that they were part of pre-scheduled trading plans. 

UnitedHealth requires its officers and directors to obtain clearance for stock trading, typically during specific windows that often open after earnings reports. However, despite the ongoing investigation, Bloomberg noted that the trades in question were reportedly approved.

According to corporate governance expert John C. Coffee Jr., it’s customary for a company’s general counsel to impose a blackout period on trading during sensitive investigations. Still, apparently, this did not occur at UnitedHealth.

The Department of Justice (DOJ) is examining whether the company’s acquisitions have led to market consolidation that violates antitrust laws, with a focus on potential monopolies in the managed-care industry.

UnitedHealth has not explicitly acknowledged the probe and has declined to disclose when its executives were informed.

However, the company maintains that the trades followed internal protocols and received approval. Reuters notes that UnitedHealth declined interviews with the involved executives and its general counsel despite inquiries.

The company has stated in regulatory filings that it undergoes routine scrutiny from various state and federal agencies, including the DOJ. Notably, following reports of the investigation, UnitedHealth’s stock experienced a 5.2% decline over two trading sessions.

Price Action: UNH shares are down 1.17% at $444.79 on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.