SEC Steps Up Probe of UnitedHealth

One of the largest companies caught up in the ongoing backdating scandal, UnitedHealth announces that the SEC has lauched a formal investigation of the health insurer's stock option practices.

UnitedHealth Group said the Securities and Exchange Commission has launched a formal probe of its stock option practices. The health insurer reported last May that it was the subject of an informal inquiry.

Last week, the company estimated that the total pre-tax non-cash charges for stock-based compensation expense for the period 1994 through 2005 ranges from $1.5 billion to $1.7 billion.

In early November, Patrick Erlandson resigned as CFO as part of sweeping compensation and governance changes. UnitedHealth is one of the largest companies to be caught up in the options backdating scandal.

Meanwhile, lawyers are trying to tie up millions of dollars worth of stock options held by outgoing UnitedHealth chief William McGuire. Almost 200 companies have disclosed internal or federal investigations related to the backdating of stock options.

In addition, UnitedHealth is one of 80 companies that have announced they must restate previously reported financial results, according to Bloomberg.

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