CalPERs claims UnitedHealth cheated investors by hiding upcoding scheme
The California Public Employees’ Retirement System (CalPERS), the country’s largest public pension fund, has taken legal action against UnitedHealth Group, accusing the company’s leaders of concealing illegal activities to continue profiting from stock sales. The lawsuit, initially filed in May and recently amended, alleges that UnitedHealth engaged in an illegal scheme to upcode Medicare Advantage patients, a practice that artificially inflated the company’s stock value.
CalPERS, a shareholder of UnitedHealth, filed the proposed class-action case on behalf of investors who purchased UnitedHealth stock between September 22, 2021, and February 20, 2025. The pension fund, which manages over $500 billion in assets and represents more than 2 million members, claims that UnitedHealth’s executives deliberately misrepresented the company’s financial performance by failing to disclose the risks associated with the Medicare Advantage scheme.
The amended complaint extensively references STAT’s Health Care’s Colossus series, government investigations, and media reports that have exposed UnitedHealth’s alleged wrongdoing. This includes a recent government watchdog report and the revelation of a second Justice Department investigation into the company. Despite these developments, UnitedHealth’s leaders continued to promote the company’s strong Medicare Advantage performance during earnings calls, misleading investors and artificially inflating the stock price.
The lawsuit accuses UnitedHealth of cheating its shareholders and violating federal securities laws by engaging in deceptive practices to boost stock values. CalPERS alleges that the company’s leadership prioritized their own financial gain over the interests of investors, allowing them to profit from selling stock while withholding critical information about the illegal activities.
The case highlights the importance of transparency and accountability in corporate governance, particularly in the healthcare industry where trust and integrity are paramount. As the legal battle unfolds, CalPERS seeks to hold UnitedHealth accountable for its alleged misconduct and ensure that shareholders are protected from deceptive practices that could harm their investments.
This article provides a detailed overview of the ongoing legal proceedings between CalPERS and UnitedHealth, shedding light on the allegations of illegal behavior and stock manipulation. Stay tuned for updates on this high-profile case as it continues to unfold.
