Settled: October 05, 2016
Labaton Sucharow was the sole appointed lead counsel in the securities fraud case against Nu Skin Enterprises, Inc (Nu Skin), a direct selling and multilevel marketing company that develops and sells personal and nutritional supplement packets.
The plaintiffs alleged that Nu Skin misled its investors and failed to disclose material facts about the success and viability of Nu Skin's business model and business practices in China; specifically, that: (1) Nu Skin's business practices violated Chinese laws and regulations; and (2) Nu Skin's rapid expansion and growth in revenues could not continue without its Chinese operations.
After two hours of oral argument, the court denied Nu Skin's motion to dismiss from the bench on February 18, 2015. On February 22, 2016, Labaton Sucharow secured a $47 million settlement, which was then granted preliminary approval on May 24, 2016.
The case is In re Nu Skin Enterprises, Inc., Securities Litigation, No. 14-cv-0033 (D. Utah). Lead plaintiff is Boston Retirement System. The defendants are Nu Skin Enterprises, Inc.; CEO, M. Truman Hunt; and CFO, Ritch N. Wood.
During the class period (October 25, 2011, to January 16, 2014), Nu Skin's Chinese operations accounted for a substantial portion of the company's revenues, and defendants repeatedly highlighted the sharp expansion of its China operations as indicative of the success and viability of its business model. However, on August 7, 2012, a Citron Research report alleged that Nu Skin's operations in China were nothing more than a pyramid scheme based on multilevel marketing, a sales strategy prohibited in China. On this news, Nu Skin's stock price declined $4.50 per share, or 9.21 percent, to close at $44.36 per share. In response, Nu Skin issued a press release assuring investors that the company was "confident that [its] China operations [we]re in compliance with applicable regulations as interpreted and enforced by the government of China."
On January 15, 2014, China's largest newspaper, People's Daily, published a report asserting that Nu Skin's operations in China violated Chinese law and that the company's operations were suspected to be an illegal pyramid scheme. The article further reported, among other things, that the company sold 104 products in China—20 more than Chinese regulations allowed. In response to these revelations, the company's stock price fell $21.24 per share, or 15.56 percent, to close at $115.23 per share that day. The following two days, two separate Chinese agencies announced they had started investigations into Nu Skin following the People's Daily report. The company acknowledged the existence of the investigations, noting that its revenues could be negatively affected. On these disclosures, the company's stock price fell 26.41 percent on January 16, 2014, and again by 6.29 percent on January 17, 2014, closing at $79.47 per share that day.
Submit Proof of Claim
If you purchased or otherwise acquired the publicly traded common stock of Nu Skin including call and put options on such publicly traded common stock, during the period between May 4, 2011 and January 17, 2014, inclusive, (the class period), and were damaged thereby, you may be entitled to receive money from the proposed settlement.
To be eligible for a payment, you must submit a Proof of Claim form by October 6, 2016 in accordance with the instructions set forth in the Notice.
A Settlement Hearing was held on October 5, 2016 at 2:00 p.m. in Courtroom 8.200 at the United States District Court for the Northern District of Utah, 351 South West Temple, Salt Lake City, UT 84101. The Court approved the Settlement and related relief in full.
If you have questions about the settlement, please contact Labaton Sucharow at email@example.com or 1-888-219-6877, or contact the Claims Administrator, A.B. Data, Ltd., at 866-963-9975.