As part of our beat here at The D&O Diary, we read all of the new securities class action lawsuit complaints as they come in. As a result, we have become quite accustomed to the reality that, as Bloomberg columnist Matt Levine famously put it, “everything, everywhere is securities fraud.” But our experience did not quite prepare us for the new complaint filed earlier this week against UnitedHealth Group that works the CEO’s murder into the complaint’s allegations. A copy of the May 7, 2025, complaint filed against UnitedHealth can be found here.
Background
Brian Thompson, United Health’s CEO, was shot and killed in New York City on December 4, 2024. Several days later, Luigi Mangione was arrested in Pennsylvania and charged with the killing, as well as several other federal crimes. Mangione has pled not guilty.
The new securities class action complaint against UnitedHealth Group opens its factual allegations with an express reference to Thompson’s murder, following which the complaint alleges that “it is commonly believed that the accused killer’s motivation to attack Mr. Thomson was due to anger regarding UnitedHealth’s policies under Thompson’s leadership, including denial of coverage.’
The complaint then goes on to allege that with Thompson as UnitedHealth’s CEO, the company’s profits increased “but the company became increasingly controversial due to its denials of coverage.” The complaint refers to a U.S. Senate report that was published just weeks before Thompson’s death citing the company’s high rate of denial for prior authorization requests for post-acute care for Medicare Advantage enrollees. The complaint also cites press reports weeks before Thompson’s murder reporting that UnitedHealth was limiting mental health care coverage for its insureds. The media reports claim that the company used algorithms that identified providers that were providing “too much therapy.”
The complaint notes that in the wake of Thompson’s murder, “the reaction was not uniformly sympathetic to Thompson” and that instead Thompson and the company “became the target of harsh criticisms from politicians, medical professionals, and consumers.” The article cites a BBC article entitled “Killing of insurance CEO reveals simmering anger at US health system.”
The complaint alleges that even after Thompson’s murder and the negative press coverage, the company on January 16, 2025, announced that it was, according to the complaint, “sticking with its previously issued guidance.” The complaint alleges that these statements were “false and misleading” because they “omitted that the Company was no longer willing (as a result of heightened scrutiny against the Company, as well as open hostility against the company from large swaths of the general public) to use the aggressive, anti-consumer tactics” it would need to use to achieve its per share earnings and adjusted net earnings targets.
Then, in an April 17, 2025, press release, the company revised its guidance for the year, lowering its net earnings per share outlook and its adjusted earnings target. The complaint alleges that the press release indicated that the company is “allowing increased coverage and care for beneficiaries of Medicare Advantage.” According to the complaint, the company’s share price declined over 22% on the lowered guidance news and fell an additional 6.3% the next day.
The Lawsuit
On May 7, 2025, a plaintiff shareholder filed a securities class action lawsuit in the Southern District of New York against United Health and certain of its current executives. The complaint purports to be filed on behalf of UnitedHealth investors between December 3, 2024 (that is, the day before Brian Thompson was murdered) and April 16, 2025 (the day the company announced it was lowering its guidance).
The complaint alleges that during the class period, the defendants made false and/or misleading statements and/or failed to disclose that:
(1) UnitedHealth had, for years, engaged in a corporate strategy of denying health care coverage in order to boost its profits, and ultimately, its share price; (2) this anti-consumer (and at times unlawful) strategy resulted in regulatory scrutiny (as well as public angst) against United Health, which ultimately resulted in the murder of Brian Thomson; (3) animus towards UnitedHealth was such that, subsequent to the murder of Mr. Thompson, may Americans openly celebrated his demise, expressed admiration for the accused killer and/or otherwise demanded that UnitedHealth change its strategy even if they condemned Mr. Thompson’s killing; (4) the foregoing regulatory and public outrage caused UnitedHealth to change its corporate practices; (5) notwithstanding the foregoing, UnitedHealth recklessly stuck with the guidance it issued the day before Thompson’s murder; and (6) as a result, Defendants’ public statements were materially false and/or misleading at all relevant times.
The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks to recover damages on behalf of the plaintiff class.
Discussion
I fully recognize that there was a lot of ugliness that came out after Thompson’s murder. I saw the messages on the Internet and in my social media feeds portraying Mangione as some kind of folk hero and even suggesting that Thompson had it coming. However, the fact that these kinds of messages were circulating on the internet does not validate them. Even though these kinds of communications took place, it is still a long stretch from that to presenting an allegation in a securities class action complaint, as this one does, that the company’s supposed “anti-consumer strategy … resulted in the murder of Brian Thompson.”
The company had one strategy, and then as a result of unfavorable media coverage, the company changed its strategy. O.K, that sounds like a more conventional securities lawsuit complaint (although not necessarily a meritorious one).
But adding allegations that the original strategy was supposedly so heinous that the company’s CEO got murdered; and that that’s why the company had to change its strategy; and then trying to make all of that add up to securities fraud, is taking securities fraud allegations to a far different, and far darker place. The murder is effectively the centerpiece of the complaint; indeed, the complaint’s factual allegations lead with the assertion that anger at the company’s practices led to Thompson’s murder.
I have written before on this blog about the phenomenon of event-driven litigation. It would be hard to think of an event in a company’s life more dramatic that the cold-blooded murder of the company’s CEO. Even though I am well-accustomed to the reality in this country that securities fraud litigation has come to reflect company setbacks more so than accounting fraud or financial misrepresentations, it still comes as, well, a surprise to me to see an event-driven securities suit where the event at issue is the CEO’s murder.
The complaint has only just been filed and it remains to be seen how it will fare. I will say that, regardless of the outcome, the new lawsuit is in some ways the ultimate expression of the reality that these days everything really is securities fraud.