Health Net, a subsidiary of St. Louis-based Centene, has agreed to pay a $340,000 penalty for alleged securities law violations, according to the Securities and Exchange Commission.
The SEC said Health Net illegally used severance agreements that took away outgoing employees' ability to obtain monetary awards from the SEC's whistle-blower program, which was developed under the Dodd-Frank Act.
Health Net added the improper provision to its severance agreements in 2011, after the SEC adopted a rule barring companies from prohibiting someone from communicating with the SEC about possible securities law violations. The health insurer removed the SEC-specific language from its severance agreements in June 2013, but retained some restrictive language until last year, according to the SEC.
Without admitting or denying the SEC's findings, Health Net agreed to pay the $340,000 penalty.
The alleged securities law violations occurred prior to Centene's acquisition of Health Net, and Centene was not a party to the case.
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