The husband of a Minnetonka, Minn.-based UnitedHealth Group executive will pay the Securities and Exchange Commission nearly $140,000 to settle accusations he eavesdropped on his wife's calls and used the information to engage in insider trading, the Minneapolis/St. Paul Business Journal reports.
Here's what you should know:
1. James E. Hengen allegedly earned more than $63,000 in illegal profits through trades connected to UnitedHealth's acquisitions of Irving, Texas-based USMD Holdings and Deerfield, Ill.-based Surgical Care Affiliates, according to an SEC complaint filed Nov. 8.
2. Mr. Hengen did not admit wrongdoing as part of the settlement. His wife — who served as a UnitedHealth subsidiary's vice president at the time of the alleged eavesdropping — is not named in the complaint, nor is she accused of wrongdoing.
3. Mr. Hengen allegedly discerned UnitedHealth was considering buying USMD by listening to his wife's work calls and asking her about how business trips went. He learned about the potential SCA transaction by looking through his wife's notebook when she left the room, the complaint states.
4. He reportedly bought 8,000-plus shares and made $32,315 by trading most of his stock when the USMD deal went public. He made $31,489 through trades connected to the SCA deal.
5. Mr. Hengen is accused of informing three others about the pending USMD transaction through text messages. Those individuals also sold their USMD stock shortly after the deal was announced, collectively making $8,340.