A union that holds shares of Sunrise Senior Living Inc., one of the nation’s largest assisted-living chains, is seeking an independent investigation into stock sales by company directors and executives before an announcement of an accounting review last May that resulted in the stock’s plummeting.
The Service Employees International Union, which says it owns a relatively small stake – 8,000 shares – of Sunrise, said in a lengthy letter to the McLean, Va.-based company that officials should appoint an external monitor to name an independent counsel to review questionable practices such as insider trading, along with stock-option grants and board compensation, and make its recommendations public.
Sunrise operates more than 400 assisted-living facilities nationwide.
Sunrise has 10 communities in operation or under development in Colorado, according to its website.
Steve Abrecht, executive director of the SEIU Master Trust, which is composed of three pension funds, said Thursday that the union wants Sunrise to respond by Dec. 15.
Sunrise officials said in a statement that there was no merit to the claims and that all of the company’s financial transactions “were conducted in a proper fashion.”
Sunrise also noted the SEIU “is currently conducting an active campaign to unionize some of our employees.”
It added: “Any board member or Sunrise employee who conducted stock transactions during the period in question could not have had prior knowledge” of accounting reviews or delays in earnings reports.
Abrecht denied that the SEIU was attempting to organize at Sunrise and said the SEIU is asking for an outside investigation as a shareholder, not as a union.
The SEIU last week won the right to represent about 95 Sunrise workers at a nursing home in Ontario, Canada. Otherwise, none of the SEIU’s 1.8 million members work for Sunrise, Abrecht said.
The SEIU said in a Nov. 20 letter to Sunrise that a review of the company’s finances has found that Sunrise directors and executives sold $32 million worth of shares between late 2005 and May, when the company publicly announced an accounting review.
Shares of Sunrise then plummeted 34 percent, causing shareholders to lose $660 million.
