DOW JONES NEWSWIRES UnitedHealth Group Inc. (UNH) settled a Securities and Exchange Commission civil lawsuit over stock-options backdating, and the company's former General Counsel David J. Lubben agreed to a $575,000 penalty in the case.
Lubben also will repay $1.4 million in ill-gotten gains and $347,211 in prejudgment interest. In addition, he agreed to an order barring him from serving as an officer or director of a public company for five years and from appearing before the SEC as an attorney for three years.
Neither UnitedHealth, one of the largest U.S. health insurers, nor Lubben admitted nor denied the allegations.
The SEC did not seek a penalty from UnitedHealth.
The settlements require court approval.
A year ago, in one of the largest executive-pay givebacks in history, former UnitedHealth Chief Executive William McGuire agreed to forfeit about $620 million in stock-option gains and retirement pay to settle civil and federal-government claims related to stock-option backdating.
The settlement came a year after the scandal led to McGuire's ouster from the Minnetonka, Minn., company. McGuire had been among the most successful and highest-paid executives in the U.S.
The SEC accused UnitedHealth of concealing more than $1 billion in stock-option compensation between 1994 and 2005 by providing senior executives and other employees with "in-the-money" options while secretly backdating the grants to avoid reporting the expenses to investors.
Stock options allow executives to buy stock at a fixed price, generally the market price on the day the options were granted.
UnitedHealth, along with dozens of other companies, was accused of pretending that options were granted at an earlier date than they actually were. They picked dates when the stock price was at a low point, allowing executives to reap outsize gains. More than 80 corporate officials have lost their jobs in the scandal.
UnitedHealth's shares closed down 2.8% at $25.74 on Monday and were unchanged in recent after-hours trading.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com
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Publié le 22 Décembre 2008 Copyright © 2008 Dowjones