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July 02, 2008 at 06:30 AM
A managed care company says it has agreed to pay $895 million into a settlement fund to resolve a suit involving allegations about the company’s old executive stock option program.
UnitedHealth Group Inc., Minnetonka, Minn., says it has “reached an agreement in principle” with the lead plaintiff in the federal securities class action suit, the California Public Employees’ Retirement System, and the plaintiff class representative, Alaska Plumbing and Pipefitting Industry Pension Trust, Anchorage, Alaska.
Neither UnitedHealth nor any of the individuals named as defendants had admitted to any wrongdoing as part of the proposed settlement agreement, UnitedHealth says.
The plaintiffs filed the suit in December 2006 in the U.S. District Court in Minnesota. The defendants include current and former officers and directors of UnitedHealth as well as the company itself.
The plaintiffs accused UnitedHealth of violating securities laws by giving top company officers too much control over stock option compensation and of not disclosing the stock option program properly.
The proposed settlement is subject to approval by CalPERS’ board, UnitedHealth’s board, and to preliminary and final court approval, UnitedHealth says.
If approved, the proposed settlement will “fully resolve all claims against the company, all current officers and directors named in the lawsuit, and certain former officers and directors named in the lawsuit,” the UnitedHealth says.
