CHICAGO - UnitedHealth Group, the largest US health insurer, and its investors have won final court approval of the $895 million settlement of a lawsuit in which the company was accused of improperly backdating stock options.
US District Judge James M. Rosenbaum approved the accord Monday in Minneapolis. He also approved a $30 million settlement by former chief executive William McGuire, reached in September. Rosenbaum awarded $64.8 million in fees to lawyers for the plaintiffs.
UnitedHealth, based in Minnetonka, Minn., was among more than 200 companies that disclosed internal or federal probes of backdating, the practice of setting dates for stock options before they are issued to magnify their value.
The total $925.5 million settlement is the largest in US history in an options-backdating case, according to data compiled by Bloomberg.
The investors sued UnitedHealth and certain officers and directors in 2006, alleging they engaged in a “scheme to reward themselves - especially their chief executive officer - and others by showering themselves with stock options.’’ The investors said the company failed to disclose stock-option backdating to them, in violation of federal securities laws.
UnitedHealth and its officers denied any wrongdoing.
McGuire was forced to resign in October 2006 after an independent law firm found evidence he participated in backdating. McGuire agreed to pay a $7 million fine in December 2007.
McGuire agreed to pay $30 million and relinquish to the company options to buy 3.68 million shares to settle the shareholder suit.
