Friday, January 11, 2008
The SEC closed its investigation into Usana Health Services without taking any action. Usana sells vitamins, nutrition bars and skin-care products through a network of distributors who receive commissions on purchases for recruiting additional people to become distributors. Former distributors have brought suit in California state court, accusing the company of fraud and operating a pyramid scheme. Since the SEC started its investigation last March, Usana's shares have dropped 40% and are among the most bet-against by short-sellers. The company's auditing firm also resigned this year. WSJ, SEC Ends Investigation of Usana Without Acting, but Lawsuits Loom.