UnitedHealth's California Clash

Early Warning

Skolnick has long expressed uneasiness about the stock options cashed in by UnitedHealth CEO William McGuire in particular. She regularly highlighted those sales as important risk factors even when she used to recommend the company's stock. But she also raised other concerns that have started to look more legitimate as time goes by.

For example, back in the fall of 2004 -- between two of UnitedHealth's biggest acquisitions -- Skolnick mentioned poor oversight of the company's New York operations. Specifically, she wondered why the company had repeatedly failed to file appropriate financial papers in the state. Her complaints seem rather perceptive now, given the problems that have since surfaced with the internal controls of a company once viewed by many -- and still viewed by some -- as perhaps the best-run corporation in America.

"We can understand one re-filing (in New York), or maybe even a second -- but five?" Skolnick wrote in a 2004 downgrade. "If the business was so sloppily run from a regulatory filing perspective, how can we be sure that no other problems will be uncovered under further review? We can't be ... hence, our downgrade."