Usana Health Sciences
saw its shares fall a day after it said the
Securities and Exchange Commission
has opened an informal inquiry in to the company.
The seller of vitamins and supplements has been under fire for several days, and lately its stock was dropping 3.4% to $47.43. Trading volume was more than double the normal level.
The drama began last week when
Barry Minkow, who served prison time in the 1990s for stock fraud but who now investigates companies for what he sees as questionable business practices, released a report critical of Usana.
Usana said in a statement Monday that it believes the SEC probe is a result of the assertions that have appeared about it in the media. Minkow has contended that the company's model for selling its products can't last because it requires new associates to constantly be coming on board.
Following Minkow's criticisms, Usana filed a lawsuit against him, and it has characterized his commentary about the company as "false and defamatory." The Salt Lake City-based company has asked the SEC to investigate Minkow's positions in its stock.
The company said it was cooperating with the regulatory inquiry.