Shares of UnitedHealth Group (UNH 0.23%) fell in May, finishing the month down 26.6%. The collapse came as the S&P 500 (^GSPC 0.55%) gained 5.5% and the Nasdaq Composite (^IXIC 0.63%) gained 7.9%.

The troubled health insurance giant faced a series of damning reports and allegations of fraud and misconduct following the sudden departure of its CEO.

CEO exits

In May, UnitedHealth's then-CEO, Andrew Witty, announced he was stepping down, citing "personal reasons." The sudden loss of its CEO sent shockwaves through the company and signaled to investors the depth and scale of UnitedHealth's ongoing issues.

The resignation came at the same time that the company told investors it was suspending guidance for 2025 due to surging medical costs.

UnitedHealth is facing a DOJ probe

UnitedHealth was already facing an investigation from the Department of Justice in a civil case, but in May, it was revealed that the DOJ's Health Care Fraud Unit is conducting a criminal investigation into the company for Medicare fraud. Although it was revealed last month, the company has apparently been under criminal investigation for a year.

Image source: Getty Images.

More questionable practices

Just a week after the DOJ revelation, The Guardian reported that UnitedHealth has been making secret bonus payments to nursing homes in order to keep ailing residents out of hospitals and save money. The report also claims the company staffed nursing homes with its own medical teams who, at times, interfered in order to keep residents who needed hospital care from receiving it.

One former UnitedHealth executive told The Guardian, "You gain profitability by denying care, and when profitability suffers for the shareholders, that's when people get crazy and do things that are not appropriate."

Just a year after the company's CEO was murdered in New York City, the company is still on its heels, with problems mounting. As James Harlow, senior vice president at Novare Capital Management, put it, "It just doesn't seem like they have a plan."

All of this has shaken investor confidence, leading in April and May to the most severe drop for an S&P 100 company since Netflix fell 54% in May 2022, according to Dow Jones Market Data.

There are just too many issues facing UnitedHealth at the moment, with no clear picture of an imminent turnaround. This once-seemingly stable investment looks far from it at the moment, and I would stay away from the stock.