An investor-led lawsuit has been dropped against UnitedHealth Group, its former CEO Andrew Witty, and CFO John Rex, which alleged the company misled investors about its corporate strategy in the aftermath of the December killing of UnitedHealthcare CEO Brian Thompson.
The lawsuit, originally filed in the Southern District of New York on May 7 and voluntarily dismissed on May 28, claimed that UnitedHealth’s public statements about its financial outlook following the murder failed to reflect an internal strategy shift regarding claims and prior authorizations, resulting in substantial losses for shareholders.
The lawsuit was dismissed “in light of the prior pending related securities fraud class action” from the California Public Employees’ Retirement System, which amended a similar complaint on May 5, alleging that UnitedHealth misled investors about its Medicare Advantage billing practices, including upcoding that inflated revenue by falsely diagnosing patients.
The CalPERS complaint, originally filed in May 2024, also claims that UnitedHealth executives engaged in insider trading by selling stock based on nonpublic information about a Department of Justice investigation into the company’s practices.
In February, The Wall Street Journal reported that the Justice Department is investigating UnitedHealth’s MA billing practices amid the allegations that the company inflated charges to maximize reimbursements. UnitedHealth has denied the existence of such an investigation.
In May 2025, the CalPERS lawsuit was updated with new allegations based on media reports and UnitedHealth’s earnings guidance downgrade for 2025. The revised guidance reflected challenges within UnitedHealth’s MA business, which the revised lawsuit claims is connected to the alleged upcoding practices and the DOJ probe. UnitedHealth executives cited rising use of physician and outpatient services among older adults and “unanticipated changes in the profile of Optum Health members.”
On May 13, UnitedHealth replaced Mr. Witty with its board chair and former CEO, Stephen Hemsley, and suspended its 2025 earnings outlook.
