In the world of health insurance, the value proposition is built on trust. Consumers, particularly those navigating complex plans like Medicare, rely on brokers to be neutral, transparent, and unbiased. The promise is simple: the broker will help you find the best plan for your needs, not their own.

For years, SelectQuote, Inc. (NYSE: SLQT) positioned itself as a modern, technology-enabled embodiment of that trust. Based in Overland Park, Kansas, and under the leadership of CEO Timothy “Tim” Danker and its executive team, the company built its business as an insurance broker that offered “unbiased coverage comparisons” and a commitment to helping people find the most suitable Medicare Advantage plan.

Investors bought into this story, seeing a growth company built on a foundation of integrity and an innovative business model.

But a recent federal lawsuit alleges that SelectQuote’s promise was a fundamental deception, and that the company’s business model was built on a different and far more troubling principle: profit over people.

DOJ Probe: Alleged Illegal Kickbacks

On May 1, 2025, the U.S. Department of Justice (DOJ) filed a sweeping False Claims Act complaint against a group of major health insurance companies and several large insurance broker organizations, including SelectQuote. The DOJ’s complaint alleges that from 2016 through at least 2021, the defendant insurers paid hundreds of millions of dollars in illegal kickbacks to the defendant brokers in exchange for enrollments into the insurers’ Medicare Advantage plans.

The DOJ’s enforcement action created a new reality for SelectQuote and its investors. The DOJ’s complaint alleges that rather than acting as unbiased stewards, the defendant brokers—including SelectQuote—directed Medicare beneficiaries to the plans offered by insurers that paid the most in kickbacks, regardless of the suitability of those plans. According to the DOJ complaint, the broker organizations even went so far as to incentivize employees and agents to sell plans based on the size of the kickbacks and, at times, would refuse to sell plans of insurers who did not pay enough.

Perhaps even more troubling are the DOJ’s allegations of discrimination. The DOJ further alleges that certain insurers, in a conspiracy with the brokers, threatened to withhold kickbacks to pressure them into enrolling fewer Medicare beneficiaries with disabilities—a population they perceived as less profitable. The DOJ complaint claims that in response, brokers and their agents rejected referrals from disabled beneficiaries and strategically steered them away from certain plans.

Investor Recourse: The SelectQuote Securities Class Action

Beyond drawing regulator's ire, SelectQuote is now the target of a private investor class action alleging violations of the U.S. securities laws.  In the class action complaint, investors claim that the DOJ’s complaint publicly unveiled the concealed truth about SelectQuote’s operations, and the market reacted immediately upon the revelation. SelectQuote’s stock price plummeted by over 19% in a single trading day, wiping out significant shareholder value.

The securities class action lawsuit, which quickly followed the DOJ’s announcement, seeks to recover damages for investors who were misled by the company's alleged misrepresentations. The suit covers a notably long “Class Period” from September 9, 2020, to May 1, 2025, contending that the alleged misconduct was not an isolated incident but a long-standing, systemic practice within the company’s business model.

For investors who purchased shares during this period, the lawsuit represents a legal avenue to seek recourse for the losses they suffered when the alleged truth of the company’s operations purportedly came to light. The central claim is that the company’s public statements about being an “unbiased” broker artificially inflated the stock price, and that the true nature of its business was a hidden risk.

For investors who purchased SelectQuote shares during the Class Period and suffered substantial losses, the process is now in motion. Hagens Berman is actively investigating these claims and urges investors with significant losses to contact the firm now to discuss their legal options. A lead plaintiff deadline has been set for October 10, 2025, for investors who wish to serve as a representative for the class.

The SelectQuote case serves as a crucial reminder that in a market driven by information, the integrity of that information is paramount. It highlights the serious legal and financial risks that can arise when a company’s public promise to customers and investors is allegedly undermined by its own undisclosed business practices.