SelectQuote Faces DOJ Probe, Investor Lawsuit Over Medicare Advantage Sales Practices

SelectQuote Inc. (NYSE: SLQT), a digital insurance platform specializing in Medicare Advantage plans, is experiencing significant legal challenges following the U.S. Department of Justice's intervention in a whistleblower lawsuit alleging deceptive sales practices.

The federal investigation triggered a sharp 19% decline in SelectQuote's stock value on May 1, 2025, reflecting investor apprehension over potential regulatory penalties and reputational damage. The allegations center on claims that SelectQuote misrepresented its business model by promoting itself as providing unbiased Medicare plan comparisons while allegedly receiving tens of millions of dollars in improper payments between 2016 and 2021. 

The DOJ complaint asserts SelectQuote discriminated against less profitable clients by steering them away from lower-margin insurance plans, raising concerns about compliance and regulatory exposure. Investor reaction to the DOJ's involvement has been pronounced, with SelectQuote's shares dropping over 40% in the six months preceding the lawsuit. 

A securities class-action lawsuit, Pahlkotter v. SelectQuote Inc. et al., has been filed on behalf of investors who purchased stock between September 9, 2020, and May 1, 2025, accusing the company of withholding material risk information regarding its sales operations and financial reporting.\n\nShareholder rights firm Hagens Berman is conducting an investigation into whether SelectQuote artificially inflated revenue figures through deceptive practices. The firm's involvement underscores the growing scrutiny on corporate accountability within the insurance distribution sector, especially concerning Medicare Advantage sales.

The ongoing legal proceedings highlight increased regulatory focus on the transparency of insurance sales platforms and their compliance with federal statutes protecting consumers and investors. This case may prompt wider industry reassessment of sales practices and disclosure obligations. Whistleblowers with material information related to SelectQuote's operations are encouraged to participate in SEC whistleblower programs, which offer financial incentives for original information leading to enforcement actions.