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International Law

: Misleading Advertising Law

USANA Settlement - From the Court Records

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Some people have a hard time understanding that the USANA did not prove any of its allegations against Minkow.

A reader emailed me this question:

"I've been engaged in a conversation with Len Clements regarding the outcome of the courtcase between USANA and Minkow.

The comments can be found at the below link where I am posting under the name geraldblack1978 and Len is posting under mwave43.

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_U/threadview?m=me&bn=19109&tid=77042&mid=-1&tof=8&rt=2&frt=2&off=1#-1

I'm not a lawyer and neither is Len so I was wondering if you could give me an explanation of the Courts decision.

Did the Court reach the verdict that Minkow had to remove all of the postings regarding USANA from his web page and was not allowed to trade in their stock anymore or was this a decision reached by Minkow and USANA seperately which is being upheld by the Courts?

I ask because to me it seems like the Courts are only enforcing what Minkow and USANA arrived at seperately. Also, I didn't see a verdict of guilty anywhere so I'm wondering how the Court could have rendered this decision without doing so.

Regards,

Gerald Black"

On the Yahoo Finance Board, Clements writes:

"Also, while I understand why those on your side of this argument like to spin the court's dismissal of the other counts besides stock manipulation as this huge blow to Usana and victory for Minkow, this is not an accurate portrayal of the facts.

Each count was not of equal importance, and you must give weight to each count accordingly. The stock manipulation count was the crux of Usana's case, and was of far more importance than those counts dismissed.

In the Court Order is states that "Usana brought this action to enjoin..." such manipulation, and their "remaining claim is for equitable relief... to enjoin Defendants from manipulation of Usana's stock." So, the very reason Usana brought this claim was to stop Minkow from attacking them (to make their stock drop), and to force him to remove his existing attacks, and that was the remaining claim.

Furthermore, by this Court Order (besides the settlement) Usana achieved the identical goal had the case went forward and they would have won - a Permanent and Final Injunction forcing Minkow to stop attacking them.

Len

Clements is wrong and Black is right.

The final order came about as the result of a joint stipulation by USANA and Minkow. The USANA Stipulation is a submission from both parties to the Court asking for a Court order in line with how the parties have decided to settle the matter - in part to avoid protracted litigation and expensive legal fees.

There is no finding of facts by the Court.

Importantly, even had USANA won their permanent injunction against Minkow, the scope of the injunction could not have included what Minkow offered - to take down the allegations at his website.

The key to understanding this is note that Tracy Coenen, an architect of some of Minkow's reports, has replicated what was on Minkow's website.

All of the information generated by the FDI on USANA is available and USANA is taking no steps to have those websites shut down - remember that last time they tried it, the Judge spanked them for a cool $150,000 in attorney fees.