Hagens Berman: 14 Days Remain To File For Lead Plaintiff In Nu Skin Class-Action Lawsuit As Stock Continues To Slump From Chinese Investigation

Hagens Berman Sobol Shapiro LLP, a national investor-rights law firm, reminds purchasers of Nu Skin Enterprises, Inc. (NYSE:NUS) (“Nu Skin” or “the Company”) stock who purchased between Oct. 25, 2011 and Jan. 16, 2014 (the “Class Period”) that the deadline to file as a lead plaintiff is 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.

In a recent release regarding fourth-quarter results, Nu Skin CFO Ritch Wood said, “We are early in the process of understanding the impact of recent events in China on our business, so it is difficult to project how reflective anticipated first quarter results will be of results for the remainder of the year.”

After a disappointing outlook from the report, the company’s stocks have continued to fall as much as 13 percent.

“The decrease in projected revenue versus our first-quarter guidance provided last November is primarily a result of the recent measures we have taken in China, slightly lower than anticipated revenue increases in other markets, and an anticipated impact of about $20 million associated with the reclassification of a small percentage of selling expenses,” Wood said recently in a release. “In addition, our first-quarter revenue guidance anticipates a four percent negative impact from foreign currency fluctuations.”

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.

Revenue from China played a significant role in the company’s growth over the last several years. 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 that included a look at Nu Skin’s business model. Nu Skin never revealed this exposé to investors and did not seek to address the allegations until the Chinese government announced its 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 $77.40 on March 6, 2014.

Bloomberg reported on Feb. 17, 2014, that China’s State Administration for Industry and Commerce plans to tighten direct selling rules following the claims brought against Nu Skin, and the Wall Street Journal said recently that January brought sharp declines when China announced its investigation of the company’s sales practices.

Hagens Berman is continuing to investigate what Nu Skin’s management knew, and when, in light of the Chinese government’s investigations and the subsequent decline of the stock price.

The deadline for investors to move for lead plaintiff in the case is March 24, 2014.

Persons with non-public information who want to consider their options to help in the investigation or take advantage of the SEC Whistleblower program may contact Reed Kathrein at 510-725-3000 or email the firm at NUS@hbsslaw.com for more information. Under the new SEC Whistleblower program, whistleblowers who provide original information to the SEC may receive rewards totaling up to 30 percent of any successful recovery made by the SEC.

About Hagens Berman

Hagens Berman Sobol Shapiro LLP is an investor-rights class-action law firm with offices in nine cities. The Firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the Hagens Berman and its successes can be found at www.hb-securities.com. The Firm’s Securities News newsletter is at http://www.hb-securities.com/newsletter. The Firm’s blog is located at www.meaningfuldisclosure.com.

Copyright Business Wire 2010

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