Beleaguered health insurer UnitedHealth Group Inc. announced that a Securities and Exchange Commission probe of the stock-options practices has been formalized.
The company was informed of the informal inquiry in April, which eventually led to the departure of chief executive William McGuire.
UnitedHealth said it will continue to cooperate with the SEC, whose investigators now have the power to subpoena documents and compel witnesses to testify.
McGuire resigned in November after an independent probe found he may have manipulated the dating of options worth hundreds of millions of dollars. McGuire agreed last month not to exercise his own options, once worth as much as $1.6 billion.
UnitedHealth is one of 80 companies that have announced they will restate previously reported financial results, and last week widened its estimate of earnings restatements related to stock options. Income for 1994 through 2005 may be reduced by as much as $1.5 billion to $1.7 billion to correct improper accounting for awarded options.
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