SEC targets Tenet
Tenet Healthcare Corp., Dallas, said last week it has been notified by the Securities and Exchange Commission that SEC investigators expect to recommend the agency bring a civil enforcement action against the company, former Chief Executive Officer Jeffrey Barbakow and five other former executives. The SEC has been investigating the adequacy of Tenet's financial disclosures regarding its Medicare outlier payments and managed-care stop-loss reimbursements for at least two years. Tenet disclosed the investigation in April 2003 and said it continues to cooperate with the probe. Tenet, Barbakow and the other executives each received what the SEC calls a "Wells notice." The recipients may respond to the investigators before the final recommendation is made, Tenet said.
Sodexho settles bias suit
Sodexho, the Gaithersburg, Md.-based food-services giant, said last week it would pay $80 million to settle a race-discrimination lawsuit filed by thousands of black employees. The class-action lawsuit was filed four years ago by employees who said they were segregated and denied promotions that went to less-qualified colleagues. Sodexho has more than 120,000 employees and annual revenue of approximately $6 billion, about 19% of which is healthcare-related. In a statement, Sodexho's parent, Paris-based Sodexho Alliance, said the company reached the settlement as a way to "avoid protracted legal proceedings, and without admitting any liability." The lawsuit by about 2,500 current and former employees had been set for trial later this month. The settlement is subject to approval by U.S. District Judge Ellen Huvelle in Washington. Officials said the company would continue to promote its diversity programs. The net expense from the settlement for fiscal 2004-2005 is expected to represent 20% to 25% of consolidated net income for fiscal 2004.