#USA #San Francisco #DOJ #SelectQuote #False Claims

SelectQuote Under Fire: Investigations and Impacts on Investors

On May 1, 2025, a significant drop in SelectQuote’s stock unfolded as it decreased by over 19%. This sharp decline occurred in response to the U.S. Department of Justice (DOJ) filing a lawsuit against SelectQuote (NYSE: SLQT), along with several other insurance brokers and major health insurance companies. The lawsuit alleges violations of the False Claims Act, raising substantial concerns among investors.

Hagens Berman, a noteworthy firm specializing in complex litigation, has called on investors affected by significant losses to rally together and report their grievances. The firm is actively seeking individuals with insights that could aid in the ongoing investigation. The case primarily scrutinizes SelectQuote's business practices, especially regarding its Senior business segment, which is focused on Medicare Advantage ('MA') plan offerings provided by well-known health insurance companies including Aetna, Anthem, and Humana.

Historically, SelectQuote has asserted that their agents deliver objective advice tailored to the individual needs of their clients. These claims are now under intense review following the DOJ's allegations. It has emerged that between 2016 and 2021, SelectQuote received substantial payments—amounting to hundreds of millions—from insurers as a reward for enrollments into their Medicare Advantage plans. Instead of acting independently, it is asserted that SelectQuote directed Medicare recipients towards the plans that offered the highest kickbacks, regardless of what might be best for the beneficiaries.

Moreover, the DOJ's complaints allege that SelectQuote and its counterparts implemented incentives for their team members to prioritize the sale of plans with higher kickbacks. Reports indicate the creation of specialized groups of insurance agents solely dedicated to promoting specific plans and, disturbingly, a refusal to sell MA plans from insurers that did not meet the kickback threshold. This monopolizing stance resulted in systematic discrimination against MA beneficiaries with disabilities, raising further ethical questions about SelectQuote’s operations.

The abrupt fallout from these allegations resulted in a considerable decrease in stock value on May 1, with investors reacting swiftly to the implications of these claims. Reed Kathrein from Hagens Berman expressed unease over the alleged steering practices, emphasizing the detrimental financial impact such strategies may have had on the corporation's performance.

Investors who suffered losses encourage those with inside information or additional insights regarding SelectQuote's operations to come forward. Hagens Berman particularly calls out for whistleblowers who could leverage the SEC Whistleblower program, designed to reward those who divulge significant information leading to successful SEC recoveries, with potential rewards reaching up to 30% of such recoveries.

This unfolding situation not only highlights the precarious position of SelectQuote amid legal challenges but also poses broader questions concerning corporate accountability in the insurance sector. With investors left scrambling and watching closely, the broader effects of these allegations may redefine the operational landscape for insurance brokers across the country. Hagens Berman's notable success in securing over $2.9 billion for victims of corporate wrongdoing speaks to their commitment and capability. Should the allegations against SelectQuote prove valid, the ramifications could echo throughout the industry.

For investors seeking to stay ahead, it will be vital to monitor not only SelectQuote’s forthcoming actions and responses to these allegations but also how the market reacts in the following months as more information comes to light.

For financial updates and ongoing coverage, investors are encouraged to sign up for alerts from Hagens Berman and keep an eye on news outlets for developments surrounding this case.