According to the law firm press release, Nu Skin is a global direct selling company with operations in 53 markets worldwide. The Company purports to develop and distribute premium quality anti-aging personal care products and nutritional supplements under its Nu Skin and Pharmanex brands. The Company's global operations generated more than $2.17 billion in revenue during 2012.
The complaint alleges that during the Class Period, defendants issued a series of false and misleading statements concerning the Company's business practices and growth prospects, particularly with respect to its Mainland China operations, upon which the Company has become very dependent for a very significant amount of its revenue and growth. Sales in Mainland China accounted for nearly one third of the Company's total revenue in the first nine months of 2013. Further, the complaint alleges that while the Company issued public statements discussing its positive results and increased guidance, it failed to disclose what are alleged to be fraudulent sales practices and non-compliance with laws and regulations in China, or their potential impact on the Company. Then, in January 2014, two Chinese agencies announced that they are probing the Company's marketing and business practices in China and that it was suspected the Company was operating as an illegal pyramid scheme. These revelations had an immediate impact on the Company's stock price, causing shares of Nu Skin's stock, which had risen from less than $70 per share to a high of $140.50 per share during the Class Period, to tumble over 44% in the two days of trading after these announcements. Nu Skin stock closed the trading day on January 17, 2014 at less than $80 per share.
On May 1, 2014, the Court ordered for Consolidation of Related Actions, appointed the Lead Plaintiff and approved the selection of Lead Counsel. On June 30, Lead Plaintiff filed a consolidated complaint.
On May 2, 2016, the parties entered into a Stipulation of Settlement. The Settlement was preliminarily approved by the Court on May 24. On October 13, 2016, the Court granted final approval of the Settlement and entered judgment in this case.