Hagens Berman Sobol Shapiro LLP, a national investor-rights law firm representing investors, updates purchasers of Nu Skin Enterprises, Inc. (NYSE: NUS) (“Nu Skin” or “the Company”) stock that the Class Period now covers investors who purchased between Oct. 25, 2011, and Jan. 16, 2014, and that the deadline for filing to be a lead plaintiff is still March 24, 2014. Investors who suffered significant financial losses related to the case can email NUS@hbsslaw.com for more information.
Three lawsuits have now been filed in the Utah District Court alleging that Nu Skin made false or misleading representations to investors regarding its business in China, and risks to its business. These cases will likely be consolidated into one case. If you bought stock in the Company during the Class Period, have significant losses in excess of $100,000 and wish to serve as a lead plaintiff in these cases, please contact Hagens Berman Partner Reed Kathrein, who is leading the firm’s investigation, by calling 510-725-3000. Additional information is available at http://hb-securities.com/investigations/NUS.
According to the complaints, Nu Skin’s Chinese business model relies on independent distributors who recruit more distributors and then earn a piece of their sales. On Jan. 15, 2014, a Chinese newspaper reported that Nu Skin was in violation of Chinese laws that prohibit pyramid schemes. Two Chinese agencies announced investigations of the company in the days following the publication of the article.
According to the suits, revenue from China played a significant role in the company’s growth over the last several years. The Wall Street Journal reported that sales in China accounted for nearly one third of Nu Skin’s total sales. Hagens Berman’s investigation shows, according to data compiled by Citron Research, that a major Chinese newspaper published an exposé on “illegal” operations in China, in June 2013. Nu Skin never revealed this exposé to investors and did not seek to address the allegations until the announcement of the Chinese government’s investigation in January 2014.Following the announcement of the Chinese government’s investigation, Nu Skin’s stock price declined dramatically, losing nearly half of its value in three days of trading. The stock price fell from a close of $136.47 on Jan. 14, 2014, to a close of $79.57 on Jan. 17, 2014. The stock continues to trade well below previous figures, closing at $84 on Feb. 24, 2014.