UnitedHealth Group Stock Scandal
UnitedHealth is a company which offers healthcare products and services. They are a big company and are considered one of the leading companies in their field. Serving over 70 million Americans they are a company that is doing a lot for the public and healthcare in general.
Recently, however, they have been involved with a UnitedHealth group stock scandal. Stock options are issued to company executives as an incentive to make the stock go up. They work by allowing the executive to buy the stock for the price that the stock was when the option was issued and therefore sell them for a profit if the stock goes up. These are used by a lot of big companies as bonuses for executives and good employees.
However, what a lot of executives have been doing is selling off backdated stock options. This means that they are issued for a date when stock was lower and therefore are worth a profit already. This allows the company executives to sell them off sooner and turn in a bigger profit. This not only hurts the company but also hurts the average stock holders who can't afford to take such a big loss in their investments.
A lot of people disapprove of stock options because they are usually only issued to executives of companies and it isn't fair to the average investor. Most people have to buy stocks for whatever they are at and then hold them till they go up. They are taking a better risk than these company executives and therefore don't like stock options.
UnitedHealth has been having their executives use backdated stock options to make more money. It has been reported that William McGuire, Stephen Hensley, and 11 executives at UnitedHealth have been using backdated stock options for their own personal gains. There have been lawsuits filed against them and the UnitedHealth group for this UnitedHealth group stock scandal.
This is not the first time stock option backdating has happened. There are over 100 other companies that are currently under investigation for backdating their stocks. It is thought to be one of the biggest scandals that has happened recently. Not only does it affect one company or a group of people, but rather affects all the investors for a large group of companies.
It is a wonder that investors still trust their money in companies like this. While stock prices have been dropping steadily and are expected to continue to drop it is nothing like what was expected. I guess investors feel that since the executives were fired that things will return back to normal if not better. For their sakes we hope they are right.
Slowly UnitedHealth will regain the confidence of their investors and people who use them. This will take a lot of time but must be done to insure that the company thrives. Most companies have scandals that go on inside them but few ever reach this kind of public state. It will be interesting to see how everything plays out between UnitedHealth and the lawsuits against them.
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