Anyone remember the
Enron timline?
The SEC investigations that heralded its collapse? Remember the tens of thousands of employees holding worthless pension plans?
Take a brief walk down the Enron memory lane. Then ask yourself, could something similar be happening to America's largest health insurers and health related organizations?
I don't know.
The mind reels. You decide.
Some excerpts from the Enron timeline:
2003
Nov. 8: Lawyers for former Enron chairman Kenneth L. Lay agree to turn over documents sought by the Securities and Exchange Commission, averting a courtroom fight.
Oct. 10: Former Enron senior accountant Wesley H. Colwell agrees to pay a $500,000 fine to settle government charges that he and other executives fraudulently manipulated the company's earnings, shifting energy-trading profits in California and other states to hide more than $1 billion in losses in 2000 and 2001.
Sept. 10: Former Enron treasurer Ben F. Glisan Jr. pleads guilty to conspiracy to commit securities fraud, becoming the first executive at the scandal-ridden firm to go to prison. Glisan also will forfeit $1.3 million in profits and penalties from a transaction that allegedly swindled his own company.
2002
. . .Nov. 7: Andrew Fastow pleads not guilty after being indicted on 78 counts of conspiracy.
. . .May 8: Several current and former Enron board members appear before a Senate subcommittee.
May 7: Internal Enron documents show that the company had a hand in manipulating California's energy market with such maneuvers as transferring energy outside the state to evade price caps and creating phony "congestion" on power lines.
Apr. 24: The House passes accounting reform package, calling for stricter oversight and stricter disclosure policies in wake of the Enron scandal.
Apr. 18: Enron's post-collapse CEO Jeffrey MacMahon resigns, calling for outside leadership of the company.
. . .Apr. 8: Lawyers for Enron shareholders seek to put on trial Wall Street practices of banks and brokerages, which played a crucial role in Enron's fraud on investors.
. . .Apr. 4: Thomas White reveals Enron showed significant support prior to his nomination as army secretary, fueling rumors of Enron influence over the Bush administration.
. . .Mar. 24: Reports show Kenneth Lay's relationship to George Bush was a mix between close friend and nudging lobbyist.
Mar. 23: Congress issues subpoenas to Enron executives to determine the fallen company's relationship with political contacts and influence over the Presidential administration's energy policy.
[You can read lots more at this link to the Washington Post]
http://www.washingtonpost.com/...
Unitedhealth the second largest health insurance company in the United States is under criminal investigation.
4 firms hit by criminal probes over CEO options
Caremark, SafeNet, Affiliated Computer join UnitedHealth as targets of investigations into 'back-dating.'
At least four more U.S. companies have become targets in a widening criminal investigation into potential stock-option abuses.
Pharmacy benefits manager Caremark Rx Inc. (Research) said Thursday that it received a subpoena from the U.S. Attorney's office in New York requesting records related to the company's granting of stock options.
Caremark also said it received a letter of informal inquiry from the Securities and Exchange Commission into both stock option grants and its relocation program.
The company said it is cooperating with both requests for information.
Caremark's disclosure is the latest involving widening investigations, both by the government and internally, into stock-option practices at several companies.
UnitedHealth Group (Research), the large U.S. health insurer, said Wednesday it received a subpoena relating to granting of stock options from the same U.S. attorney's office, in New York's Southern District. Last week, UnitedHealth said it might have to restate past earnings by as much as $286 million as it reviews stock option practices.
http://money.cnn.com/...
Does this sound legal to you? Where there's smoke, is there fire?
Companies are under scrutiny for potential "back-dating" of stock options. Back-dating occurs when a company sets the grant price for the stock option retroactively to maximize potential profit for executives.
Stock options, widely used to pay senior executives, are meant to give managers incentive to boost their company's share price. Each option usually gives the recipient a chance to buy a share of company stock at a certain price at a future date.
Prosecutors and regulators want to find out if the effective dates on some of those options were improperly changed, or back-dated, to guarantee extra pay for executives no matter how the stock fared.
Is someone cooking the books Enron style?
The company also said it had received a request from the Internal Revenue Service for documents from 2003 relating to stock options and other compensation for executive officers named in its annual proxy statements. UnitedHealth said it would cooperate with both offices.
Last week, UnitedHealth said it might have to restate past earnings by as much as $286 million as it reviewed stock option practices.
http://www.nytimes.com/...
On Nov. 19, 2001, Enron restated its third-quarter earnings and tried to restructure a $650 million obligation that could come due.
What followed was the Enron implosion, bankruptcy and criminal trials.
When will the Sherron Watkins of Unitedhealth stand up?
Feb. 14, 2002: Enron executive Sherron Watkins testifies before a House Committee, sharply disputing previous testimony and implicating Jeffrey Skilling and Andrew Fastow as culpable for Enron's demise.
Connect the dots.