new York
Cnn
–
One of the largest American companies and a member of the exclusive Dow Jones Industrial, one of the largest.
The crisis engulfing United has struck a crescendo this week when CEO Andrew Witty has resigned suddenly for “personal reasons”.
UNITEDHEALTH too quickly abandoned its financial guidelinesblame the soaring medical expenses.
And then The Wall Street Journal Dropping the hammer, revealing that United Health is under federal criminal investigation for possible medication fraud.
The developments amazed investors, triggering a spectacular loss of confidence. Unitedhealth (Oneh) Actions have lost half of its value – an amazing 288 billion dollars – in the space of a month. His action course plunged Thursday at his lowest level since April 2020, at the height of the pandemic.
It is a spectacular reversal of fortunes for one of the most powerful companies in America and the largest health insurer in the country.
The problem to United’s age comes almost exactly six months after Murder of Brian ThompsonOne of its senior executives. Thompson’s cheeky filming, in the center of Manhattan, drew international attention and faced a deep public resentment towards the health care industry.
The Unitedhealth Seloff gathered Thursday, with the report of the newspaper of a federal criminal investigation leading to Unitedhealth shares 13%, leaving them on the right track for their worst week since 1998, according to FactSet Data.
The DOJ health care fraud unit is supervised an investigation into a possible medical fraud in United, reported the newspaper.
Unitedhealth responded to the report by displaying a statement Online which described the reports of the journal as “deeply irresponsible” because the document recognized the precise nature of potential criminal allegations is not clear.
“We have not been informed by the Ministry of Justice of the supposed criminal investigation, without official allocation, in the Wall Street Journal today,” said Unitedhealth in the press release. “We maintain the integrity of our Medicare Advantage program.”
The MJ refused to comment.
Jeffrey Sonnenfeld, founder of the Yale, director general of Leadership Institute, said that the sudden nature of the CEO’s transition to Unitedhealth is quite revealing.
“The fact that the board of directors has evolved with so much speed means that it has obviously lost confidence in the CEO. It must be bad enough if they moved quickly,” said Sonnenfeld. “It’s amazing.”
Unitedhealth describe The CEO is changing as a decision of spirit “for personal reasons” and the company said that he had agreed to serve as a principal advisor. But Sonnenfeld suspects that the mind was forced.
“The” personal reasons “are the humiliation of this implosion,” he said.
Unitedhealth turns to a familiar face to clean the mess: Stephen Hemsley, his former long -standing CEO and current president.
Hemsley praised the mind to display “real integrity and compassion during one of the most difficult periods that a company can endure”.
The new CEO has also clearly indicated his dissatisfaction with the United Holder’s Trumbling.
“For all stakeholders, including employees and shareholders, I am deeply disappointed and apologize for the performance setbacks that we met in external and internal challenges,” said Hemsley at a conference call on Tuesday.
Sonnenfeld praised the decision of the board of directors of Unitedhealth to bring Hemsley, who led the company to success between 2006 and 2017.
“He knows where the bodies are buried, and he is the perfect guy to go,” he said.
Morgan Stanley’s analyst Erin Wright agrees, describing Hemsley in a research report as “the most appropriate person to intervene as CEO at this stage in the light of recent reverse”.
Analyst UBS AJ Rice, in a customer relationship, praised Hemsley as a “regular hand to lead the company during this turbulent period”.
Hemsley will have work to do.
Beyond the reported Doj’s investigation, United Health faces a meticulous examination of several parts of the federal government.
In his Annual reportUnited acknowledged that the company “has been involved or is currently involved in various government surveys, audits and opinions”.
United said that they include “investigations, audits and routine, regular and special opinions” by a wide range of agencies, including the DOJ, the Internal Revenue Service, the Department of Labor and the Securities and Exchange Commission.
Developments have shown investors – in particular the decision to abandon the 2025 financial guidelines.
Bank of America lowered United to “buy” “neutral” on Tuesday, warning that he could take years to the company to recover.