The Securities and Exchange Commission filed, and settled, civil fraud charges against Tenet Healthcare Corp. and four former senior executives.
The charges accused the company and executives of failing to disclose to investors that Tenet's strong earnings growth from 1999 to 2002 was driven largely by its exploitation of a loophole in the Medicare reimbursement system. Once Tenet finally revealed its scheme to the investing public and admitted that its strategy was not sustainable, the market value of Tenet's stock plunged by over $11 billion.
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