ONHEALTH NETWORK: SEC Investigation Imperils Acquisition

      The Seattle-based OnHealth Network Co., which operates a health information Web site, announced yesterday that the Securities and Exchange Commission is investigating the company's employee stock options, casting doubt on the firm's acquisition by Healtheon/WebMD, theBloomberg News/Los Angeles Times reports. In an SEC filing, the company stated, "If it is determined by the board of directors of Healtheon/WebMD that, as a result of developments in the SEC investigation of ...[our] stock option grants, there will be a material delay in the effectiveness of the registration statement, then Healtheon/WebMD may terminate this merger agreement." The company completed its own internal investigation of the employee stock option debacle, concluding that it offered options to personnel at below fair- market value. Consequently, OnHealth revised its 1999 annual report to reflect changes to its financial results for the past three fiscal years. The company's revised statements for the first quarter of this year indicate a $21.85 million loss, or 93 cents per share. OnHealth's sale to Atlanta-based Healtheon/WebMD, the largest health-related Internet company, had been scheduled for completion in the third quarter of this year (6/22).