A proposed class action lawsuit has been filed against UnitedHealth Group, its CEO Andrew Witty, and CFO John Rex, alleging that the company misled investors about its corporate strategy in the aftermath of the December killing of UnitedHealthcare CEO Brian Thompson.
The lawsuit, filed by an investor in the Southern District of New York on May 7, claims 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 May 7 investor lawsuit comes shortly after the California Public Employees’ Retirement System 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 proposed class action claims that the killing of Mr. Thompson was believed to be motivated by anger toward UnitedHealth’s coverage policies, referencing recent government and media reports that highlight the company’s prior authorization and claims denial rates, which have at times been shown to be above the industry average.
One referenced Senate report from October said the largest Medicare Advantage insurers have prioritized profits over patient care by increasing the use of prior authorization in recent years to frequently deny post-acute care services to older adults. According to that report, UnitedHealthcare denied prior authorization requests for post-acute care at rates about three times higher in 2022 compared to its overall denial rates for prior authorization requests.
“In the wake of Mr. Thompson’s murder, the reaction was not uniformly sympathetic to Mr. Thompson, who was a father,” the complaint said. “Instead, Mr. Thompson and UnitedHealth became the target of harsh criticism from politicians, medical professionals, and consumers.”
According to the investor complaint, when UnitedHealth reaffirmed its 2025 earnings guidance on January 16, the company did not disclose its approach to the increased scrutiny around its claims denial practices, allegedly making the guidance misleading.
On April 17, UnitedHealth revised its earnings outlook for 2025, lowering its projections from net earnings per share of $28.15 to $28.65 to $24.65 to $25.15. Adjusted earnings were downgraded from $29.50 to $30.00 per share to $26.00 to $26.50.
The lawsuit claims that the revision exposed the company’s shift in strategy to address consumer concerns, which had been allegedly kept from investors until then. The revision caused UnitedHealth’s stock price to drop by more than 22% in a single day, marking its largest one-day fall since 1998.
The investor is specifically alleging that UnitedHealth’s actions violated the Securities Exchange Act of 1934 through false or misleading statements that artificially inflated the company’s stock price.
The California Public Employees’ Retirement System class action lawsuit against UnitedHealth accuses the company of securities fraud related to its Medicare Advantage billing practices. The lawsuit, originally filed in May 2024 and amended in March, claims that UnitedHealth misled investors about its operations, including alleged upcoding practices that inflated revenue by falsely diagnosing Medicare Advantage patients. The complaint 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. 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.”
“Defendants stunned the market by cutting UnitedHealth’s 2025 projected earnings by 12%, citing problems in its Medicare Advantage business,” the supplemented complaint from CalPERS said. “Analysts following the company immediately linked this downgrade to the DOJ investigations into UnitedHealth’s coding practices and the recent reforms to the Medicare Advantage risk adjustment payment model. As alleged in the [supplemented complaint], it was through the April 17 disclosure that the relevant truth about these statements was disclosed to investors.”
