Legal News

Former chief executive of UnitedHealth Group agrees to pay $30M to settle action

By Jason Siegel

The former chief executive of UnitedHealth Group Inc., William McGuire, has agreed to pay $30 million to settle a shareholder class action lawsuit brought after it was revealed that executives and directors of the Minneapolis-based health care provider had backdated $2 billion in unexercised stock options.

Under the proposed agreement, which is subject to a judge's approval, McGuire also agreed to cancel options to purchase 3.675 million shares of stock to settle claims. San Diego's Coughlin, Stoia, Geller, Rudman & Robbins represents the lead plaintiff in the case, the California Public Employees' Retirement System (CalPERS), which stated in a press release on Wednesday that the settlement is the largest cash recovery ever obtained from an individual defendant in a securities class action. In re UnitedHealth Group Inc. PSLRA Litigation, No. 0:06-cv-01691 (D. Minn.).

UnitedHealth's former general counsel, David Lubben, also agreed to pay $500,000 as part of the proposed settlement.

McGuire and Lubben did not participate in an $895 million settlement announced a few months ago in the same case involving several other executives and directors of UnitedHealth ? the largest agreement to date involving stock options backdating claims.

Separately, UnitedHealth and several former executives, including McGuire and Lubben, agreed to pay $900 million in December to several pension funds in a derivative case involving the backdated stock options. In re UnitedHealth Group Inc. Shareholder Derivative Litigation, No. 0:06-cv-01216 (D. Minn.).

-- Amanda Bronstad

Full post as published by Legal Pad | LA on September 11, 2008 (boomark / email).