United Health Options Backdating Suit Gets Class Action Status

March 19, 2008 (PLANSPONSOR.com) - A federal judge in Minneapolis has granted class-action status to a lawsuit against UnitedHealth Group Inc. over stock options backdating.

The Associated Press reports that U.S. District Judge James Rosenbaum certified the suit brought by the California Public Employees Retirement System (CalPERS) alleging shareholders were hurt when UnitedHealth was forced to restate profits after allegations of backdating were made public (See Court Denies UnitedHealth’s Plea to Dismiss Backdating Suit ). UnitedHealth was forced to restate profits back to 1994 by $1.5 billion before taxes.

UnitedHealth argued that CalPERS actually made $23 million on its UnitedHealth trades, depending on things like which accounting method and share price are used, but Rosenbaum said that issue can be decided on later, according to the AP. Trial is set to start July 1.

The options backdating scandal at UnitedHealth led then-Chairman and CEO William McGuire to step down from his post (See UnitedHealth’s McGuire To Depart over Stock Options Scandal ).