WellCare ( WCG) could soon take some dramatic action that speaks a whole lot louder than words. As early as today, The Wall Street Journal reports, WellCare plans to oust CEO Todd Farha, CFO Paul Behrens and General Counsel Thaddeus Bereday. In doing so, WellCare will send a powerful message to investors starved for information throughout the company's three-month government probe. Patrick Burns, a spokesman for Taxpayers Against Fraud, already sees the writing on the wall. "First there was smoke," Burns says. "Now we're seeing windows being smashed and people jumping -- or being thrown out -- below. I'm not saying there's fire. I'm sure not going to be insuring that building, though." For its part, WellCare says that it "does not comment on speculation about the company by members of the media or others." Up to now, WellCare has said almost nothing about a sweeping government probe that drew some 200 federal and state agents to its corporate headquarters last fall. Indeed, WellCare has repeatedly suggested that the company itself remains in the dark. Meanwhile, a special board committee has been researching the cause of the probe with the promise of taking appropriate action when its work ends. Still, based on the market's reaction, few expected so much drama. WellCare's stock, which has been recovering some ground recently, was down 9.7% to $46 on news of the possible shakeup. Looking back, however, WellCare sent at least one possible signal to the market. Notably, in early December, WellCare excluded its top three executives from participating in a generous retention plan. Under that program, all other employees -- including two at the officer level -- could secure sizable bonuses and some promise of job security. By the time that WellCare adopted that plan, TheStreet.com had already raised questions about two of the three company executives whose days now appear to be numbered. The first story, published a few weeks after a government raid of the company's headquarters, highlighted Farha's
spotty track record at other troubled health insurers. The second, later that same month, focused on the conflicting roles filled by Bereday. Notably, Bereday serves not only as WellCare's top lawyer but doubles as the company's chief compliance officer as well. "I think that companies are realizing that executives shouldn't be wearing both of those hats," Burns says. "That's a fairly obvious conflict. "We saw it in the case of Tenet ( THC)," he adds. While Tenet has settled its own massive probe, the company's former general counsel/chief compliance officer remains under government scrutiny and still faces possible fines. Burns assumes that WellCare's executives could fare a little better, however. "I don't think they'll get thrown out to the sharks," he says. "They'll have a nice golden parachute, I'm sure." Burns views WellCare's rumored shakeup as the first step in a turnaround process. "If the board is negotiating the departure of three top executives, they're not doing that because there isn't a problem," he says. "They're doing it because there is a problem -- and a fairly substantial one at that."