UnitedHealth, the large health insurer stands as the poster child for widespread white collar crime in companies’ handling of their stock option grants. The company announced an earnings restatement of between $400 million and $1.7 billion for its fraudulent handling of stock options. The CEO, William McGuire already stepped down.
The new Chief Executive Stephen J. Hemsley apologized before adding this about the company’s 12 year history of abuse:
"I can only say how deeply we regret the shortcomings in the administration of our stock option programs. How sincerely we apologize for the difficulty this has caused for so many. It was embarrassing and we regret it."
His audience, investment analysts ponder the impact of this scandal on the UnitedHealth’s stock price. The key is not so much the earnings restatements but later monies paid for lawsuits, fines, and penalties.
In true "shortcomings" and "embarrassments" a simple apology is enough. Lawsuits, fines and penalties are the result of crimes. Watch the feds handling of these cases. A study indicated over 2,000 publicly traded companies likely backdated their stock option grants. The Justice Department is investigating only 100. How many will actually be charged with criminal acts? How many of those will settle? How many individuals will go to jail for widespread corporate corruption over a dozen years under a “pay for performance plan”?
After you watch this, ponder what’s happening now under the “No Child Left Behind” educational program as it's built on the same sandy foundation…
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