business
SEC targets WellCare executives
NEWS IN BRIEF — Posted Jan. 30, 2012
Three former top executives at Florida health plan WellCare are facing action from the Securities and Exchange Commission, in addition to lawsuits from the company's shareholders and the company itself.
Todd Farha, former chief executive officer; Paul Behrens, former chief financial officer; and Thaddeus Bereday, former general counsel, were named in a civil action filed by the SEC on Jan. 9. The action seeks compensatory damages, return of performance-based pay from their time as executives, and an order barring the men from acting as officers or directors for other companies.
The men are accused of conspiring to keep more than $40 million meant to pay for care for Medicaid enrollees, then using the money to boost earnings, and finally selling $91 million in stock at a price that was inflated by those earnings. They all resigned in 2007.
In March 2011, a federal grand jury in Tampa, Fla., indicted Farha, Behrens, Bereday and two other former WellCare executives on Medicaid fraud charges. The men have denied any wrongdoing.
Under its new management, WellCare reached a settlement with state and federal authorities under which it did not admit wrongdoing but paid back the $40 million to the state and a $137.5 million fine.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2012/01/30/bibf0130.htm.
