The murder of Brian Thompson, the CEO of UnitedHealth Group’s (NYSE: UNH) UnitedHealthcare, brought to light – or rather, into focus – a string of legal issues that have been plaguing the company.
Specifically, the company is mired in a series of Department of Justice (DoJ) antitrust actions, a probe, and at least one class action lawsuit. The mass legal action, initiated by the City of Hollywood Firefighters’ Pension Fund, became a particularly hot topic as it alleged massive insider trading on the part of Thompson and other executives of UnitedHealth.
The murdered CEO and other high-ranking personnel of the healthcare giant are accused of executing a large number of massive insider UNH stock sales when faced with a DoJ probe over supposed anti-competitive practices, as reported by the Wall Street Journal in February.
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The biggest UnitedHealth executive insider trades
Publicly available data, as retrieved by Finbold on December 6 from SecForm4, indeed shows nine common stock sales made by high-ranking executives between October 2023 – the start of the relevant period for the class action – and press time.
In total, the senior officers offloaded approximately 228,000 UHN shares. The three biggest sales were executed by Director Stephen Hemsley – 121,515 shares on October 17, 2023, and 66,081 on December 5 of the same year, for an estimated total of $102 million – and Brian Thompson – 28,943 shares on February 16, 2024, for an estimated total of $15 million.
What is perhaps even more interesting is that the insider trading allegations – once they started making the rounds once more – had a far greater stock market impact than the murder of CEO Brian Thompson.
Investors react to UnitedHealth insider trading allegations
Specifically, UnitedHealth stock closed in the green on the day of the fatal shooting – December 4 – but was 5.21% in the red at the time of the latest close at a price of $578.97. By press time, the pre-market action on Friday has not shifted the situation as UNH shares are up only 0.26%.
Still, investor reaction might not be entirely unexpected. Indeed, netizens’ reaction to the fatal shooting is overwhelmingly in the range between indifferent and gleeful, with some even seeing the action as ‘street justice’ as the assailant reportedly wrote the words ‘deny,’ ‘defend,’ and ‘depose.’
The phrase ‘Delay, Deny, Defend’ is a descriptor of a notorious strategy – and a book describing said strategy – allegedly frequently used by insurance companies to deny claims. It supposedly often leads to people being unable to pay for necessary treatment, face bankruptcy, or not have anesthesia through an entire surgery.
Brian Thompson was particularly unpopular as the CEO of the company with the highest claim denial rate.
Why UnitedHealth might be facing even more trouble
Finally, along with the murder of the chief executive, the insider trading class-action lawsuit, and the DoJ probe, UnitedHealth Group is facing an apparent deluge of other major legal issues.
For example, the Federal Government began its attempt to block the giant’s acquisition of home health and hospice provider Amedisys, claiming it would harm the overall industry and customers by reducing competition and granting UnitedHealth undue power.
Additionally, the healthcare giant is under pressure from another lawsuit – in this case over an alleged wrongful death – claiming it is knowingly using a faulty artificial intelligence (AI) algorithm with a 90% error rate to deny otherwise legitimate insurance claims, even overriding physicians recommendations and assessments.
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