Litigation

Usana Health Sciences loses big in court

By Tracy Coenen

Consequently, the evidence now indicates only that Defendants engaged in the lawful trading of securities. Because USANA did not meet its burden, the court strikes the second claim for relief under California?s anti-SLAPP statute.

A ruling yesterday in the Usana Health Sciences (NASDAQ:USNA) v. Barry Minkow & Fraud Discovery Institute case in United States Court for the District of Utah is a big blow to Usana.

The judge’s order essentially grants FDI’s anti-SLAPP motion and dismisses all but one of Usana’s claims under state law (the bulk of what Usana was claiming in their complaint).

But here’s the best part: Usana cannot pursue money damages under federal securities law (Rule 10B-5). They could seek “injunctive relief”… but there’s really nothing for Usana to ask for an injunction on anymore. Barry has no current positions in Usana stock, so there’s nothing to claim there. And the First Amendment protects free speech, so Usana really can’t shut Barry up… our laws allow him to criticize Usana if he wants. Theoretically, Usana could still pursue a claim of unlawful stock manipulation, but they really have no case in that regard. (As a friend of mine says: NOPE-SORRY!) (more…)

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Full post as published by The FRAUDfiles Blog on March 04, 2008 (boomark / email).