UnitedHealth Group Inc., the country's second-largest health insurer behind WellPoint Inc., said Tuesday that federal regulators have begun a formal investigation into its historical stock options practices.
The Securities and Exchange Commission's formal order follows an informal inquiry begun in April. Minnetonka, Minn.-based UnitedHealth said in SEC filing it intends to cooperate with the investigation.
The company's own internal review found errors in its stock options accounting that will cost some $400 million to $1.7 billion to correct. UnitedHealth has said it will have to restate its earnings back to 1994. The scandal forced out former Chairman and CEO William McGuire.
"This is a routine step in the process, and the company continues to cooperate fully with the SEC," said UnitedHealth spokesman Don Nathan.
UnitedHealth shares fell 22 cents to close at $53.23 on the New York Stock Exchange, and dipped 85 cents to $52.38 in the aftermarket session.
