SelectQuote Faces Legal Challenges Following DOJ Investigation Into Medicare Sales Practices
SelectQuote Inc., a digital insurance platform renowned for its Medicare Advantage plans, is facing intense scrutiny following intervention by the U.S. Department of Justice (DOJ) into a whistleblower lawsuit that alleges deceptive sales practices. This investigation has sparked a class-action lawsuit from investors, reflecting growing concerns about the company's business practices and regulatory compliance.
The seeds of this legal upheaval were planted when the DOJ took action related to allegations of improper conduct at SelectQuote. On May 1, 2025, the company's share price experienced a staggering 19% plunge in a single day, a response to the unveiling of serious accusations regarding its operations. As a result, investors who purchased shares between September 9, 2020, and May 1, 2025, are now involved in a lawsuit that claims they were misled about the company's operational practices and regulatory obligations.
The lawsuit, formally known as Pahlkotter v. SelectQuote Inc. et al., presents a case that highlights serious concerns over how SelectQuote presented its services to the public. While the company has marketed its offerings as providing ‘unbiased advice’ and ‘neutral plan comparisons,’ the lawsuit argues otherwise. Claims within the lawsuit assert that SelectQuote directed customers towards Medicare plans from insurers that provided the highest commissions, accepted illegal kickbacks to favor certain insurers, and violated federal regulations, including the False Claims Act.
According to the DOJ's findings, SelectQuote allegedly engaged in these malpractices from 2016 through at least 2021, reaping tens of millions in improper payments while systematically steering customers away from lower-margin plans.
The fallout from this revelation has been significant. The stock's sharp decline has resulted in more than a 40% drop within the last six months alone, a reflection of investor apprehension concerning the company's potential liabilities and the damage to its reputation. Investors are now seeking answers and restitution as they argue that the company failed to disclose critical risks related to its sales methodologies, ultimately leading them to overestimate the company’s fiscal health and growth predictions.
Hagens Berman, a law firm dedicated to protecting shareholder rights, is investigating the extent to which SelectQuote's revenue figures may have been artificially inflated through misleading actions. Reed Kathrein, a partner at the firm, noted, “The DOJ's intervention elevates this situation from a common business dispute to a significant federal issue. Our investigation seeks to determine if SelectQuote's claims of providing unbiased advice were merely a cover for a profit-driven sales strategy built on kickbacks.”
For investors who have experienced significant losses or possess information that could support this investigation, Hagens Berman is urging them to come forward. As they continue their efforts, there is also an emphasis on the importance of whistleblowers who may have inside knowledge related to SelectQuote's operations. The SEC’s whistleblower program offers rewards of up to 30% for individuals providing original information that leads to successful enforcement action.
To recap, SelectQuote's ongoing legal troubles serve as a stark reminder of the need for transparency and ethical conduct in the insurance industry, particularly in markets as sensitive as Medicare. Investors are encouraged to stay vigilant and aware of potential issues related to their investments in light of these serious allegations. Hagens Berman invites affected investors to contact them for more information about their burgeoning case against SelectQuote, maintaining that corporate accountability is paramount in fostering trust within the financial markets.
The seeds of this legal upheaval were planted when the DOJ took action related to allegations of improper conduct at SelectQuote. On May 1, 2025, the company's share price experienced a staggering 19% plunge in a single day, a response to the unveiling of serious accusations regarding its operations. As a result, investors who purchased shares between September 9, 2020, and May 1, 2025, are now involved in a lawsuit that claims they were misled about the company's operational practices and regulatory obligations.
The lawsuit, formally known as Pahlkotter v. SelectQuote Inc. et al., presents a case that highlights serious concerns over how SelectQuote presented its services to the public. While the company has marketed its offerings as providing ‘unbiased advice’ and ‘neutral plan comparisons,’ the lawsuit argues otherwise. Claims within the lawsuit assert that SelectQuote directed customers towards Medicare plans from insurers that provided the highest commissions, accepted illegal kickbacks to favor certain insurers, and violated federal regulations, including the False Claims Act.
According to the DOJ's findings, SelectQuote allegedly engaged in these malpractices from 2016 through at least 2021, reaping tens of millions in improper payments while systematically steering customers away from lower-margin plans.
The fallout from this revelation has been significant. The stock's sharp decline has resulted in more than a 40% drop within the last six months alone, a reflection of investor apprehension concerning the company's potential liabilities and the damage to its reputation. Investors are now seeking answers and restitution as they argue that the company failed to disclose critical risks related to its sales methodologies, ultimately leading them to overestimate the company’s fiscal health and growth predictions.
Hagens Berman, a law firm dedicated to protecting shareholder rights, is investigating the extent to which SelectQuote's revenue figures may have been artificially inflated through misleading actions. Reed Kathrein, a partner at the firm, noted, “The DOJ's intervention elevates this situation from a common business dispute to a significant federal issue. Our investigation seeks to determine if SelectQuote's claims of providing unbiased advice were merely a cover for a profit-driven sales strategy built on kickbacks.”
For investors who have experienced significant losses or possess information that could support this investigation, Hagens Berman is urging them to come forward. As they continue their efforts, there is also an emphasis on the importance of whistleblowers who may have inside knowledge related to SelectQuote's operations. The SEC’s whistleblower program offers rewards of up to 30% for individuals providing original information that leads to successful enforcement action.
To recap, SelectQuote's ongoing legal troubles serve as a stark reminder of the need for transparency and ethical conduct in the insurance industry, particularly in markets as sensitive as Medicare. Investors are encouraged to stay vigilant and aware of potential issues related to their investments in light of these serious allegations. Hagens Berman invites affected investors to contact them for more information about their burgeoning case against SelectQuote, maintaining that corporate accountability is paramount in fostering trust within the financial markets.
Topics Financial Services & Investing）
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