CalPERS Sues UnitedHealth
CalPERS has filed a class-action lawsuit against UnitedHealth Group alleging that improper stock-option grant procedures caused the pension plan to lose more than $20 million, the Sacramento Bee reports. More than 12 lawsuits have been filed against UnitedHealth in Minnesota federal court involving the way the insurer dated stock options for top executives, including a $1.6 billion grant to the company's CEO.
Federal prosecutors and the Securities and Exchange Commission are investigating the insurer, along with dozens of other companies, to determine whether option grants were timed to allow executives to receive large profits.
UnitedHealth has said it might have to restate as much as $286 million in earnings for stock-related compensation since 2003.
CalPERS owns about 6.7 million shares in UnitedHealth stock. Pension plan officials said UnitedHealth's practices cost the fund between $21 million and $22 million (Chan, Sacramento Bee, 7/13).