Litigation

SEC drops informal investigation into Usana Health Sciences

By Tracy Coenen

Last week the Securities and Exchange Commission (SEC) informed Usana Health Sciences (NASDAQ: USNA) that it was closing its informal investigation into the company and taking no further action at this time. The pro-MLM camp has trumpeted this as a complete victory for Usana, proclaiming that the SEC basically said their business structure was completely legal and all was rosy at the company.

What does the letter from the SEC to Usana really mean? It means that the SEC is closing their investigation for now. Nothing more, and nothing less.

It is certainly not a vindication for Usana. While the company and its executives can celebrate the fact that the investigation is currently closed, that doesn?t mean they?re operating by the book or they?ll get a pass into infinity.

What this really means is that the SEC did not have enough to warrant moving their investigation of Usana from the informal phase to the formal phase. But I still believe that Usana is committing a serious fraud against its shareholders and distributors. Could they be committing fraud even though the SEC closed their informal investigation? Of course! (more…)

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Full post as published by The FRAUDfiles Blog on January 14, 2008 (boomark / email).