When it comes to avoiding insider trading, guess we’ll just have to take UnitedHealth Group’s word for it.
The sticky situation is this: Stephen Hemsley, the former CEO of UnitedHealth Group and its current board chair, just so happens to own an investment firm that manages his and other portfolios of UnitedHealth stock, according to STAT News.
Hemsley’s firm is called Cloverfields Capital Group, and it oversees accounts with direct and indirect ties to UnitedHealth.
You might wonder, does Hemsley’s knowledge of the inner workings at UnitedHealthcare impact the trading decisions made at Cloverfields?
Well, according to Cloverfields — via UnitedHealthcare, no less — nope!
But is it true? Unfortunately, there’s no way to know for sure, due to a gap in the Securities and Exchange Commission’s federal disclosure requirements.
To put it simply, we’d want to know if Cloverfields traded shares of companies tied to UnitedHealthcare during periods in which the insurance company experienced major changes or fluctuations. In other words, did Cloverfields have insight as to how those changes would affect the related companies when they traded the shares?
But we just don’t know. STAT reports they identified two transactions that fall into a “gray area” of corporate governance.
Now, to be clear, the arrangement itself — Hemsley as board chair and Cloverfields owner — is perfectly legal. And there is no indication that Cloverfields is engaged in illegal trading activity.
The problem is that, because of opaque trading laws, the best we’ve got is a UnitedHealth spokesperson telling STAT that its financial dealings are legal and fully disclosed.
If you’re still feeling a little less than assured . . . join the club.
It begs the question why the government doesn’t enact more definitive disclosure laws to enable clearer communication on stock ownership and trading activities — especially when those activities involve influential and powerful organizations like UnitedHealthcare.
