A SelectQuote shareholder has filed a proposed class action lawsuit against the insurance broker and its top executives, alleging the company misled investors about its operations and financial health amid a Department of Justice investigation.
In May, the DOJ filed a sweeping lawsuit against several major insurers and Medicare Advantage brokers, including SelectQuote, alleging the brokers received tens of millions of dollars in kickbacks from Humana, Aetna, and Anthem between 2016 and at least 2021.
In exchange, the brokers allegedly steered Medicare beneficiaries toward the insurers’ plans, regardless of their quality or suitability for enrollees. The DOJ also claims the brokers discriminated against less profitable beneficiaries, particularly those with disabilities, by restricting their enrollment in certain plans.
Following the DOJ’s complaint, SelectQuote’s stock price dropped by more than 19% on May 1.
The stock decline was a direct result of SelectQuote’s failure to disclose its involvement in the alleged scheme, according to the Aug. 11 class action complaint filed in New York federal court by SelectQuote investor Robert Pahlkotter.
The complaint asserts that investors who purchased SelectQuote stock between September 9, 2020 and May 1, 2025 should receive compensatory damages because the company’s executives misled the market about its financial performance and regulatory compliance. The lawsuit also alleges that SelectQuote executives knowingly made false statements, causing the company’s stock price to be artificially inflated.
SelectQuote has previously said the DOJ’s allegations are false and result from a lack of clear understanding of the insurance industry and the company’s business model.
“As we have previously disclosed, we have cooperated with the DoJ’s inquiries since 2022,” the company said in a May 9 statement. “We firmly reject these allegations and will defend our reputation as a compliant and fair-dealing standard bearer in the Medicare Advantage industry.”
