Business Insurance reports that the motion, filed in Ramsey County, Minnesota District Court says Hatch lacks legal basis to demand the documents because he failed to pinpoint the state law the company may have violated. UnitedHealth also says the attorney general’s investigation could impede investigations already under way by the federal government and an independent committee of the company’s board of directors.
In addition, the motion says the demand also requests information that is legally privileged and is overly broad, in violation of Minnesota law, according to Business Insurance. Hatch asked for documents dating back to January 1, 1997, related to compensation plans and employment agreements for UnitedHealth’s officers and directors, stock option plans, disclosures regarding the compensation of the company’s directors and officers, minutes of meetings, all documents provided to any external investigators and all documents from any internal investigations.
In May, UnitedHealth announced that the Securities and Exchange Commission (SEC) was conducting a formal investigation into its practices in awarding stock option grants (See UnitedHealth Under Fire for Stock Options ). Several shareholder lawsuits have been initiated by public pension funds that claim UnitedHealth’s stock option backdating practices led the company to overstate its earnings (See UnitedHealth Sued Again Over Option Dating Allegations ).
Hatch withdrew the state’s participation in one such lawsuit in order to conduct its own investigation into the company’s stock option practices (See MN Requests Separate Investigation of UnitedHealth Stock Option Grants ).
UnitedHealth is one of more than 20 companies being looked at by federal entities in a probe that is said to be bigger than the investigation into mutual fund trading practices following the Enron collapse (See Stock Option Probe Biggest Since Abusive Fund Trading Cases ).
« Court Throws Out Claim of Emotional Distress for Cutting Retiree Health Benefits