UnitedHealth Group said the Securities and Exchange Commission has launched a formal investigation into its historical stock-option granting practices. In its latest SEC filing, the nations second-largest health insurer said it was notified of the probe on Dec. 19, 2006. The Minnetonka, Minn.-based company had been under an informal SEC inquiry since April 2006 for allegedly manipulating the timing of stock options granted to former Chairman and Chief Executive Officer William McGuire. McGuire and a number of other top officials resigned last year after an internal review concluded that many of the billions of dollars in stock options they had received since 1994 were likely backdated to maximize their value.
Last month, UnitedHealth said it might cut up to $660 million off its historical earnings to correct accounting problems stemming from its former options practices. UnitedHealth said in its SEC filing that it has cooperated and will continue to cooperate with federal investigators. Company officials could not be reached for comment.