UnitedHealth faces startling lawsuit over CEO death | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

UnitedHealth (UNH) suffered a disturbing conclusion to 2024 that had a major domino effect on the health care industry.

On Dec. 4 of last year, UnitedHealthcare CEO Brian Thompson was shot and killed in front of a Hilton hotel in midtown Manhattan.

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The suspect, Luigi Mangione, allegedly left behind bullet shell casings at the scene that had the words “deny,” “defend” and “depose” written on them. Those three words often describe tactics health insurance companies use to dodge paying claims.

Mangione unexpectedly gained a group of supporters who related to his anger toward the health care industry. Many people took to social media to express frustration over the industry’s long history of denying insurance claims, even for people who are terminally ill.

UnitedHealth increasingly faced backlash over its policies and practices, such as allegedly using artificial intelligence to deny claims, which prompted consumers to protest.

A UnitedHealthcare office building.

Image source&colon; Shutterstock

UnitedHealth sued over its company strategy

Following these challenges, UnitedHealth shareholders have grown increasingly worried about what impact this outrage will have on their investments in the company, and those concerns have finally manifested in the form of a class-action lawsuit.

In the lawsuit filed on May 7, UnitedHealth investor Roberto Faller alleges that the health insurance giant failed to disclose that it had previously engaged in a corporate strategy of denying health care coverage to boost its profits and share price.

“This anti-consumer (and at times unlawful) strategy resulted in regulatory scrutiny (as well as public angst) against UnitedHealth, which ultimately resulted in the murder of Brian Thompson,” reads the lawsuit.

He also claimed that the company made “false” and “misleading” statements about its corporate strategy amid backlash over Thompson’s murder.

“On December 3, 2024, ahead of its December 4, 2024, investor conference in New York City, UnitedHealth introduced its 2024 outlook,” reads the lawsuit. “The guidance included net earnings of $28.15 to $28.65 per share and adjusted net earnings of $29.50 to $30.00 per share. This guidance was materially false and misleading at the time it was issued because it omitted how the company would have to adjust its strategy (which resulted in heightened denials compared to industry competitors) because of scrutiny from the United States Senate, as well as public scrutiny.”

In January, after Thompson’s murder, UnitedHealth said that it was sticking with its previous guidance. Faller claims that this decision was “deliberately reckless” as the company allegedly failed to disclose that it was no longer willing to use “aggressive, anti-consumer tactics” to achieve $28.15-$28.65 in earnings per share, or $29.50 to $20 in adjusted net earnings per share.

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In April, UnitedHealth later slashed its full-year guidance, stating in a press release that its 2025 net earnings outlook would be revised to $24.65 to $25.15 per share and adjusted earnings of $26 to $26.50, as a result of “heightened care activity.”

This move caused UnitedHealth’s stock price to fall by about 22% on April 17 and by an additional 6.33% on April 18, which caused the Dow Jones Industrial Average to dip by 1.3%.

Faller claims that he and other investors “suffered significant losses and damages” as a result of this stock price decline and UnitedHealth’s alleged “wrongful acts and omissions.”

He claims that UnitedHealth violated federal securities laws under the Securities Exchange Act of 1934 and is seeking an unknown amount of damages from the company.

UnitedHealth CEO previously flagged a growing problem

The lawsuit comes after UnitedHealth CEO Andrew Witty flagged during an earnings call last month that the company’s performance during the first quarter of 2025 was “unusual and unacceptable,” despite seeing a $9.8 billion year-over-year increase in revenues as it welcomed 780,000 new customers.

“In UnitedHealthcare’s Medicare Advantage business, we had planned for 2025 care activity to increase at a rate consistent with the utilization trend we saw in 2024,” said Witty during the earnings call. “Instead, though, first quarter 2025 indications suggest care activity increased at twice that rate.”

He said that while more customers seek preventative care services, such as in-home visits and clinical assessments, he flagged that the number of follow-up care visits, such as specialist visits and other outpatient services, was higher than the company anticipated.

“A dynamic at play in our group Medicare Advantage business is we’re seeing a significant and disproportionate increase in utilization largely within our public sector group retiree business, and this is a population that experienced the greatest year-over-year premium increases,” said Witty.

In response to these changes, Witty emphasized that UnitedHealth “will work to better anticipate and address these factors” this year.