(Michael Neidorff, Centene CEO involved in insider trading)
Several legal proceedings were piled up against Centene, including Michael Neidorff, the CEO. Together with its directors and officers for insider trading, they are guilty of violating federal securities laws, breaches of administrative duties, and other misconduct.
Centene Corporation is one of the top frauds in the U.S. and is renowned for dispensing pledged service to insured patients. The list of court cases they are entangled in is a testament to their morals. They are overpaid in the merger and acquisition with Health Net and indulged in sales of insider stocks. They exposed its violations of federal securities law, California tax laws, and government regulations. The company was provoked by millions of dollars in damages with the corruption within Centene.
The merger and acquisition of Health Net by Centene are discussed in the meetings of the legal system which uncovered the company’s core values which are naive swindle customers who depend on them for insurance coverage.
Aimed to ease the challenges of availing healthcare, the government Medicaid managed care program, which seems to be an accessible resource for corporations like Centene, makes large profits.
Centene had to buy Health Net’s outstanding stock because of its $6.8 billion mergers which called for stockholder and regulatory approvals. They failed to disclose problems acquired with Health Net business despite taking eight months of conduct.
The company resorted to other tactics of rejecting to pay claims to substance abuse treatment centers in various parts of the country to make up for the losses in the market capitalization of over $1 billion due to the merger.
Investigations were conducted by the California Department of Insurance (CDI) and the California Department of Managed Health Care (DMHC) on Centene.
Michael Neidorff: the Mastermind of Insider Trading
Centene approved false financial documents in the company’s public filings without disclosing events that would affect their financial statements.
Neidorff, along with Richard A. Gephardt, Jeffrey A. Schwaneke, Carol E. Goldman, sold their shares using their knowledge of Centene’s nonpublic information, which was a gross violation of the company’s internal policies, the counterpart of insider trading, and applicable law.
Michael Neidorff sold 367,427 shares of Centene stock valued at $19,950,436.04 using important, nonpublic information. The majority of these sales took place between December 10 and December 31, 2015.
Centene was forced to buy its stock from Neidorff at a higher price. Because during that period, Neidorff had significant and nonpublic information connected to Health Net’s inner rot of unproductive products and poorly conceived policies in California and Arizona. These exchanges disclose the practices of the company.
Health Net’s potential significant tax obligation and soaring unpaid claims from substance abuse providers were purposefully hidden by Neidorff.
Gephardt disposed of his Centene stock of 15,910 shares on June 28, 2016, and June 29, 2016, which fetched $1,096,058.20. These sales went unnoticed since they started less than a month after Gephardt signed a 10b5-1 trading strategy on May 26, 2016. The shares sold accounted for 28% of Gephardt’s Centene equity holdings. Gephardt had significant and nonpublic knowledge at the time of sale.
Similarly, Schwaneke sold 7,450 shares of Centene stock for a total of $422,815. Between December 8, 2015, and February 9, 2016, Schwaneke gave up over 5,000 shares worth nearly $300,000 to the company in exchange for the company paying its taxes.
Schwanke made a $130,000 profit by selling 2,000 shares of Centene stock. He also had inside information about Health Net’s poorly constructed policies when selling the stocks.
Their sales of Centene common shares enriched each of them. Neidorff and Gephardt’s stock sales made them appear as interested directors. Even in 2006, there were accusations and action cases against Centene and Neidorff for insider trading.
If they can engage in such actions as rampant insider trading, their commitment to paying out beneficiaries’ claims should be exposed to the public.
