MINNEAPOLIS (CN) – The SEC will not fine UnitedHealth Group for handing out more than $1 billion to insiders by backdating stock options, but it will force the company’s general counsel David Lubben to cough up $2.3 million, the agency said in announcing settled complaints.
The SEC said the Minnetonka, Minn.-based health insurer will not be fined because it cooperated with the SEC investigation.
UnitedHealth’s false financial filings caused it to overstate its income by more than $1.5 billion from 1994 through 2005. But, the SEC said, in announcing its slap on the wrist, UnitedHealth “took significant remedial actions in response to the findings of its internal investigation, including the implementation of new controls designed to prevent the recurrence of fraudulent conduct, removal of certain senior executives and board members, and the recoupment of nearly $1.8 billion in cash, options value and other benefits from several former and current officers, through, among other things, derivative litigation and the voluntary re-pricing and cancellation of retroactively-priced options.”
Lubben, the general counsel, made $1.1 million from the options backdating, and consented to an order to disgorge $1.4 in ill-gotten gains, $347,000 in interest and a $575,000 fine. He also has been slapped with an injunction ordering him not to do it again.