UnitedHealth Group (UNH) Shares Crater Again on WSJ Report of DOJ Criminal Investigation; Securities Class Action Pending – Hagens Berman

/EIN News/ -- SAN FRANCISCO, May 16, 2025 (GLOBE NEWSWIRE) -- On May 15, 2025, investors in UnitedHealth Group (NYSE: UNH) saw the price of their shares crater as much as $59.13 (-19%) after The Wall Street Journal reported that the company is under criminal investigation for possible Medicare fraud. This latest development comes on the heels of the filing of a securities class action suit against UnitedHealth, and just one day after its CEO Andrew Witty stepped down and the company pulled its 2025 guidance which the company issued less than one month ago.

Hagens Berman is investigating the securities fraud claims alleged in the pending suit and urges UnitedHealth investors who suffered substantial losses to submit your losses now. The firm also encourages persons with knowledge who may be able to assist in the investigation to contact its attorneys.

Class Period: Dec. 3, 2024 – Apr. 16, 2025
Lead Plaintiff Deadline: July 7, 2025
Visit: www.hbsslaw.com/investor-fraud/unh
Contact the Firm Now: UNH@hbsslaw.com
                                     844-916-0895

The Wall Street Journal “UnitedHealth Group Is Under Criminal Investigation for Possible Medicare Fraud”:

On May 14, 2025 the WSJ reported that, according to people familiar with the matter, the Justice Department is investigating UnitedHealth Group for possible criminal Medicare fraud and that the investigation has been active since at least last summer. The report noted that, “[w]hile the exact nature of the potential criminal allegations against UnitedHealth is unclear, the people said the federal investigation is focusing on the company’s Medicare Advantage business practices.”

News of the criminal investigation comes just one day after UnitedHealth announced that it was retracting its already revised April 17 guidance and that the company’s CEO Andrew Witty was being replaced by Stephen Hemsley, the current chairman and former CEO of UnitedHealth.

The Pending UnitedHealth Group Inc. (UNH) Securities Class Action:

Adding to its woes, UnitedHealth Group Inc. is facing a securities class action lawsuit in the Southern District of New York. The action, Faller v. UnitedHealth Group Inc., et al., No. 1:25-cv-03799, centers on the health care giant's financial outlook for fiscal year 2025.

The lawsuit alleges that UnitedHealth misled investors regarding its earnings projections. Initially, on December 3, 2024, the company projected net earnings per share (EPS) of $28.15 to $28.65 and adjusted EPS of $29.50 to $30.00. This guidance was reaffirmed on January 16, 2025. However, on April 17, 2025, the company sharply reduced its forecast to a net EPS of $24.65 to $25.15 and an adjusted EPS of $26.00 to $26.50, citing unexpectedly higher care utilization among its Medicare Advantage members. This revision triggered a roughly $170 billion decline in UnitedHealth's market value on the same day, with shares plummeting 22%.

The lawsuit further contends that the revised guidance followed years of an alleged corporate strategy by UnitedHealth to deny health coverage to inflate profits and its stock price. The plaintiff claims this strategy drew increased scrutiny from regulators and lawmakers, fueled public discontent, and purportedly contributed to the December 4, 2024, murder of Brian Thompson, the CEO of UnitedHealthcare, UnitedHealth's insurance division. The complaint highlights the intense public reaction to Mr. Thompson's death, suggesting widespread animosity towards the company's practices.

According to the lawsuit, this heightened regulatory and public pressure compelled UnitedHealth to alter its practices regarding coverage denials. Despite this alleged shift, the company proceeded to reiterate its initial, now-contested, financial guidance. The lawsuit argues this reiteration was reckless and unrealistic given the purported changes in the company's operational strategies.

The abrupt reversal in guidance on April 17th caught investors off guard. Following the announcement, at least one analyst reportedly suggested that the lowered utilization management, potentially driven by the aforementioned scrutiny, could be a factor in the increased care utilization cited by UnitedHealth.

The lawsuit seeks to represent investors who purchased or acquired UnitedHealth Group stock between December 3, 2024, and May 13, 2025, and alleges violations of federal securities laws.

Hagens Berman’s Investigation

Shareholder rights firm Hagens Berman is investigating the alleged claims.

“The latest news of a DOJ investigation and the CEO’s departure is disturbing and raises serious questions about the information flow from UnitedHealth to the market,” said Reed Kathrein, the Hagens Berman partner leading the investigation.

If you invested in UnitedHealth and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »

If you’d like more information and answers to frequently asked questions about the UnitedHealth Group case and our investigation, read more »

Whistleblowers: Persons with non-public information regarding UnitedHealth should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email UNH@hbsslaw.com.

About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman’s team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.

Contact:
Reed Kathrein, 844-916-0895