UnitedHealth says execs kept no secrets, asks court to toss lawsuit

UnitedHealth Group and top executives are asking a Minnesota court to toss a shareholder lawsuit alleging that it caused stock prices to dive by withholding damaging information.

The lawsuit – a consolidated class-action – names the late UnitedHeathcare CEO Brian Thompson as one of the defendants. Thompson was killed Dec. 4 on his way to an investor conference at the New York Hilton Hotel.

On the day of Thompson's death, Magistrate Judge David T. Schultz signed an order giving UnitedHealth, chairman Stephen J. Hemsley and Thompson until March 1, 2025 to respond to the complaint. UnitedHealth Group CEO Andrew Witty is also a defendant.

The California Public Employees’ Retirement System, the largest public pension fund in the United States, is the lead plaintiff in the lawsuit. The class covers any owners of UnitedHealth Group shares between Sept. 22, 2021 and Feb. 27, 2024.

Plaintiffs point to the acquisition of Change Healthcare, a deal valued at $13 billion, as the start of problems that UnitedHealth allegedly sought to cover up. Defendants ask the court to dismiss the lawsuit for failure to state a claim.

Change for the better?

Change operated a clearinghouse, processing health insurance claims and moving data from entity to entity. According to a UnitedHealth estimate, more than half of American medical insurance claims “pass through (or touch)” Change’s systems.

On Feb. 24, 2022, the Department of Justice sued to block the Change acquisition on antitrust grounds, arguing UnitedHealth would gain access to sensitive data that it could wield against its competitors. UnitedHealth prevailed and the Change acquisition was finalized.

Throughout the dispute, UnitedHealth executives insisted that the company had “internal firewalls that prevent the sharing of competitively sensitive information across business units,” plaintiffs say.

Shares soared from about $350 per share when the Change acquisition was announced to more than $500 per share in February 2024, when Change networks fell victim to a systemwide cyberattack.

UnitedHealth executives were already keeping secrets from investors, plaintiffs allege. On Oct. 10, 2023, UnitedHealth received notice that the DOJ had launched a “non-public antitrust investigation into the company,” the lawsuit states.

“Concealing this material information from investors and the public, UnitedHealth chairman Stephen J. Hemsley and several other senior executives immediately took action – selling more than $100 million of their own UnitedHealth stock at artificially inflated prices as the market and other investors remained unaware of the new federal antitrust investigation,” the lawsuit claims.

When the Wall Street Journal exposed the investigation in a Feb. 27, 2024 article, the price of UnitedHealth stock declined over $27 per share, falling from $525.32 per share on Feb. 26, 2024 to $498.28 on Feb. 28, 2024, the lawsuit notes.

On the offensive

In its reply filed Friday, UnitedHealth opened by taking on the Wall Street Journal article.

"The article did not claim that UHG had done anything wrong and, a year later, the DOJ has
taken no public action in connection with this purported investigation. Nonetheless, a
modest stock price decrease followed," the motion reads.

Plaintiffs fail to show "loss causation," UnitedHealth attorneys say. Their complaint alleges misstatements about UHG’s internal data firewalls and its HouseCalls program for Medicare Advantage beneficiaries, their motion notes.

"Plaintiff puts forward no allegations to connect what it says are UHG’s alleged misstatements to the purportedly 'corrective' WSJ article about an antitrust investigation," the motion says.

Likewise, plaintiffs cannot prove any false statements, insider trading or any of the other bad faith claims, UHG attorneys say in a 51-page motion.

"The Complaint is rife with legally inadequate 'must-haveknown' allegations based only on status or the nature of the subject matter," the motion says. "Further, Plaintiff’s theory that the Individual Defendants made 'suspicious' stock sales misreads the record—one that, for instance, shows they increased their stock holdings, which is the opposite of selling to profit from alleged fraud."

© Entire contents copyright 2025 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.