Nature's Sunshine Products may have issued false and misleading statements to investors regarding its foreign operations while top executives made millions by selling their stock at artificially high prices.
Insider Selling/Undisclosed Related Party Transactions
Products or Services
This is a securities fraud class action against Nature's Sunshine Products and certain of its officers and directors. Nature's Sunshine engages in the manufacture and marketing of nutritional and personal care products.
The securities fraud class action lawsuit alleges Nature's Sunshine issued materially false and misleading statements regarding Nature's Sunshine's business and financial results. On February 17, 2006, Nature's Sunshine issued a press release in which it stated that it had expanded its previously announced review of selected financial information with respect to certain of its foreign operations and that it had received notice from Nasdaq that its common stock was subject to delisting. On March 20, 2006, Nature's Sunshine filed an 8-K with the SEC announcing that its previous financial statements could no longer be relied upon and that it had expanded its investigation to include other matters related to Nature's Sunshine's financial statements. Then on March 24, 2006, Nature's Sunshine announced that it had received a non-compliance notice from the Nasdaq due to its failure to file its Form 10-K in a timely manner . On this news the Company's stock fell to $11.68 per share.
According to the class action complaint, the true facts, which were known by Nature's Sunshine but concealed from the investing public during the Class Period, were as follows: (a) Nature's Sunshine lacked requisite internal controls, and, as a result, Nature's Sunshine's projections and reported results issued during the Class Period were based upon defective assumptions and/or manipulated facts; and (b) the Company's financial statements were materially misstated due to its failure to properly account for foreign transactions.
As a result of Nature's Sunshine' false statements, Nature's Sunshine's stock traded at artificially inflated prices during the Class period, reaching a high of $23.24 per share, allowing its top officers to reap hundreds of thousands of dollars in ill-gotten bonuses and certain of the defendants to sell over $2.9 million worth of their Nature's Sunshine stock at artificially inflated prices.
Name (Stock Symbol)
Natures Sunshine Products, Inc.
Natures Sunshine Products Inc., a direct-selling company, manufactures and markets tablets and encapsulated herbal products, high-quality natural vitamins, food supplements.
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