Monday, March 24, 2014
Labaton Sucharow Files Class Action Lawsuit on Behalf of Investors in Nu Skin Enterprises, Inc. (NUS)
NEW YORK (March 24, 2014) — Labaton Sucharow LLP filed a class action lawsuit on March 24, 2014 in the U.S. District Court for the District of Utah. The lawsuit was filed on behalf of all persons who, between October 25, 2011 and January 16, 2014, inclusive (the "Class Period"), purchased or otherwise acquired the securities of Nu Skin Enterprises, Inc. (NYSE:NUS) ("Nu Skin" or the "Company").
If you purchased or acquired Nu Skin securities during the Class Period as defined above, you are a member of the "Class" and may be able to seek appointment as Lead Plaintiff. Lead Plaintiff motion papers must be filed with the U.S. District Court for the District of Utah no later than March 24, 2014. A lead plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as lead plaintiff to share in any Class recovery in this action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member. You may retain counsel of your choice to represent you in this action.
If you would like to consider serving as lead plaintiff or have any questions about this lawsuit, you may contact Rachel A. Avan of Labaton Sucharow, at (800) 321-0476 or (212) 907-0709, or via email at firstname.lastname@example.org. If you are a member of the Class, you can view a copy of the complaint and join this class action online here.
Nu Skin, founded in 1984, develops and markets skin products and nutritional supplements through a global network of distributors. As a direct sales company, Nu Skin sells its products at a wholesale price to its distributors, who may then retain any sales margin that they receive upon reselling the products. Nu Skin operates in more than 50 countries, including China, which has been among the Company's fastest growing regions. Like many jurisdictions, China prohibits the operation of "pyramid schemes," or operations that present themselves as direct selling networks but offer members no substantive business opportunities other than recruiting new distributors.
The complaint charges Nu Skin and certain of its officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and U.S. Securities and Exchange Commission Rule 10b-5 promulgated thereunder. The complaint alleges that, during the Class Period, Defendants made false and misleading statements and concealed material information about Nu Skin's business, operational, and compliance policies, specifically that: (1) the Company's operations in China involved pyramid selling schemes in violation of Chinese law and regulations; and (2) as a result, the Company's financial statements were materially false and misleading at all relevant times.
The market slowly learned of Nu Skin's improper practices in China through several disclosures. First, on August 7, 2012, Citron Research published a report claiming that Nu Skin's operations in China were a pyramid scheme based on multi-level marketing, a sales strategy prohibited in China. Then, on February 14, 2013, the U.S. Federal Trade Commission published more than 200 pages of documents pursuant to a request under the Freedom of Information Act for consumer complaints regarding Nu Skin from the previous five years. The truth was more fully revealed on January 15, 2014. A leading Chinese newspaper reported that the Company operated an illegal pyramid scheme in China. The next day, China's State Administration of Industry and Commerce announced that it was investigating Nu Skin, and the Company disclosed that it was under investigation. On January 17, 2014, a second Chinese agency, the Ministry of Commerce, reported that it would probe the Company. In reaction to each of these disclosures, Nu Skin's stock price fell precipitously.
The plaintiff is represented by Labaton Sucharow.