USANA Health Sciences, Inc. - Securities Class Action

Company and Case Information

IMPORTANT INFORMATION | INDEX OF FILINGS | SEARCH

Home

Index of Filings

News and Press Releases

Filings

Decisions

Settlements

Litigation Activity Indices

Top Ten List

Annual/Quarterly Updates

Clearinghouse Research

Articles & Papers

Search

Related Sites

About Us

Local Rules

Sponsors

Register

_______________
Copyright (c) 2001
Stanford Law School

USANA Health Sciences, Inc. Summary: The complaint alleges violations of the federal securities laws, including Section 10(b) of the Securities Exchange Act of 1934. USANA is a health sciences company engaged in the manufacture and sale of nutritional and personal care products headquartered in Salt Lake City, Utah.

Specifically, the Complaint alleges that, throughout the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results and failed to disclose, among other things, that: (1) the Company's multi-level marketing system was operating as a pyramid scheme; (2) the majority of the Company's Associates did not sell to consumers, but sold to other Associates; (3) the Company was experiencing an exceedingly high Associate attrition rate, resulting in an unsustainable sales force; (4) 74% of the Company's new Associates were failing within the first year; and (5) 87% of the Company's Associates were losing money. The Complaint further alleges that, as a result of these false statements and omissions, USANA common stock traded at artificially inflated or distorted prices. On March 15, 2007, the Fraud Discovery Institute issued a press release and The Wall Street Journal published an article concerning a three-year investigation by the Fraud Discovery Institute that had revealed that USANA's multi-level marketing system was an unsustainable pyramid scheme. In reaction to this news, the price of the Company's stock declined $8.92 per share, or 15%, to close on March 15, 2007 at $49.85 per share, on unusually heavy trading volume.

According to an article dated November 15, 2007, on October 17, 2007, the U.S. District Court for the District of Utah appointed the shareholder with the largest financial interest as the lead plaintiff in a securities fraud case, finding that the shareholder was presumed to be the most adequate plaintiff despite an institutional investor's competing motion for appointment as lead plaintiff. … Three class members, including Irina Sech, the Steamfitters Local 449 Pension Fund and Marvin Mullholland, moved for appointment as lead plaintiff. Mullholland withdrew his motion. … The district court found that Sech had the largest financial interest and was presumed to be the most adequate plaintiff.

On December 3, 2007, the lead plaintiff filed an Amended Consolidated Class Action Complaint, and the defendants responded by filing a Motion to Dismiss the Claims Asserted in the Amended Consolidated Class Action Complaint. Before any ruling on the motion, on April 18, 2008, the plaintiff filed a Second Amended Consolidated Class Action Complaint, amending the class period. The defendants again responded by filing a motion to dismiss.

A press release dated July 24, 2008 announced that USANA Health Sciences, Inc. (NASDAQ: USNA) the United States District Judge Dale Kimball has dismissed with prejudice the shareholder class action suit filed in March of 2007 against the company and certain of its officers and directors. The judge ruled that the plaintiffs failed to assert any actionable securities laws claims against USANA. "We are pleased that the court ruled in our favor on this motion to dismiss," said Dave Wentz, chief executive officer, USANA Health Sciences, Inc. "This was a case we believed from the beginning had no foundation and we will now be able to move forward without further distraction or expense."

INDUSTRY CLASSIFICATION:
SIC Code: 2833
Sector: Consumer Non-Cyclical
Industry: Personal & Household Products

COMPANY/ISSUER NAME:	USANA Health Sciences, Inc.
COMPANY/ISSUER TICKER:	USNA
COMPANY WEBSITE:	http://www.usanahealthsciences.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Ashok Kapur, et al. v. USANA Health Sciences, Inc., et al.

COURT: D. Utah	DOCKET NUMBER: 07-CV-00177
JUDGE NAME: Hon. Dale A. Kimball
DATE FILED: 03/26/2007	SOURCE: Notice of Filing
CLASS PERIOD START: 07/18/2006	CLASS PERIOD END: 03/14/2007
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Dreier LLP (New York) 499 Park Avenue, New York, NY, 10022 (voice) 800.952.8897, (fax) 800.952.8897, classlaw@dreierllp.com Graham Law Offices Ambassador Plaza; 150 South 600 East Suites 5A & 5B, Salt Lake City, UT, 84102 (voice) 801.596.9199, (fax) , _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 2

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
[Proposed] Class Complaint - Demand for Jury Trial
Type: Complaint		Date on the document: 03/26/2007
Order
Type: Order		Date on the document: 10/17/2007
Amended Consolidated Class Action Complaint For Violations Of The Federal Securities Laws
Type: Complaint		Date on the document: 12/03/2007

REFERENCE COMPLAINT

Ashok Kapur, et al. v. USANA Health Sciences, Inc., et al.

COURT: D. Utah	DOCKET NUMBER: 07-CV-00177
JUDGE NAME: Hon. Dale A. Kimball
DATE FILED: 04/18/2008	SOURCE: Docket
CLASS PERIOD START: 07/18/2006	CLASS PERIOD END: 03/27/2008
TYPE OF COMPLAINT: Second Amended and Consolidated
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Dreier LLP (New York) 499 Park Avenue, New York, NY, 10022 (voice) 800.952.8897, (fax) 800.952.8897, classlaw@dreierllp.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Second Amended Consolidated Class Action Complaint For Violations Of The Federal Securities Laws
Type: Complaint		Date on the document: 04/18/2008
Memorandum Decision And Order
Type: Memorandum		Date on the document: 07/23/2008
US District Court Civil Docket
Type: Docket		Date on the document: 07/28/2008

OTHER DOCUMENTS

Case Name and/or Number:
Type:		Date on the document:

WARNING AND DISCLAIMER OF LIABILITY:
The information included on this Web site, whether provided by personnel employed by Stanford Law School or by third parties, is provided for research and teaching purposes only. Neither Stanford University, Stanford Law School, nor any of their employees, agents, contractors, or affiliates warrant the accuracy or completeness of the information or analyses displayed herein, and we caution all readers that inclusion of any information on this site does not constitute an endorsement of the truthfulness or accuracy of that information. In particular, this Web site contains complaints and other documents filed in federal and state courts, which make allegations that may or may not be accurate. No reader should, on the basis of information contained in or referenced by this Web site, assume that any of these allegations are truthful.

Go to Search page | Go to Case Index page | Back to Top

�