Even though it believed UnitedHealth Group concealed more than $1 billion worth of stock-option backdating, the Securities and Exchange Commission is letting the company settle its charges without paying a penny in fines. However, another United executive joins the ranks of those who are reimbursing the SEC over their allegedly ill-gotten gains.

The investigation looked into charges the company awarded stock options with a strike price that was tied to the date of its lowest 52-week share price -- rather than to the price on a specified single date -- and did not tell investors of this arrangement.

The SEC said that practice allowed United executives to have stock options worth far more than they would have been otherwise.

The SEC cited United's "extraordinary cooperation in the commission's investigation, as well as its extensive remedial measures" as reasons the company was not charged with fraud, and why it could settle for nothing on charges it violated the reporting, books and records, and internal controls provisions of the federal securities laws. United did not admit or deny guilt.

United, the SEC said, had recouped nearly $1.8 billion in cash and stock-option value through litigation, annulment of options and other means. The company also shared details of its own backdating investigation with the SEC, the agency said.

United instituted controls to ensure backdating would not occur again, the SEC said. Also, United removed senior executives and board members who were deemed complicit, the agency said.

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Last Modified: Sunday, January 18th, 2009 @ 01:00

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