UnitedHealth Attempts to Stop Options Probe by MN Attorney General

September 14, 2007 (PLANSPONSOR.com) - In a hearing on Thursday UnitedHealth Group Inc. tried to stop a probe by Minnesota Attorney General Lori Swanson into its backdating of stock options.

The Minneapolis Star Tribune reports that, in the Minnesota Court of Appeals, Swanson argued her office should have access to information also being sought by federal regulators. An attorney on behalf of UnitedHealth said the attorney general does not have the right to the data.

Swanson’s office has begun a procedure called a civil investigative demand (CID), a pre-lawsuit subpoena sometimes used by the attorney general’s office to collect information, according to the news report. Last year, former Attorney General Mike Hatch served a CID on UnitedHealth and the health insurer sought a protective order to stop Hatch from getting the documents

The request was denied by a Ramsey County District Court judge and UnitedHealth appealed that decision.

Swanson said the backdating hurt Minnesota shareholders, including the state, which owns $130 million worth of UnitedHealth stock, according to the Star Tribune. She said she was asking for 13 interrogatories, or sets of written questions, and has issued 17 document requests.

Federal agencies are investigating UnitedHealth’s actions concerning the stock options (See SEC Formalizes Probe Into UnitedHealth’s Stock Options Practices ), and there also are shareholder lawsuits making their way through federal court in Minneapolis (See Court Denies UnitedHealth’s Plea to Dismiss Backdating Suit).

The company has acknowledged top officials received stock options that were backdated to times when the company’s stock was low. In October UnitedHealth announced its chief executive would step down after a report from an internal probe into the company’s stock option practices (See UnitedHealth’s McGuire To Depart over Stock Options Scandal ).