Nu Skin to pay $47 million to settle Chinese pyramid suit
A lawsuit filed by Nu Skin shareholders against the company appears to be drawing to a conclusion.
The class-action lawsuit was filed in February 2014, accusing Nu Skin of misleading investors about the legality of its operations in China.
The class-action lawsuit has been quietly playing out over the past two years, with news yesterday of a potential $47 million dollar settlement.
The settlement, which will be paid by Nu Skin’s insurers, is not expected to result in a net charge to the company’s income statement, Nu Skin said in a filing.
The company said the deal is subject to court approval and a final approval is expected in mid-2016.
The settlement would see an end to class-action lawsuit. The impact on Nu Skin’s global business operations, if any, is as of yet unclear.
Following the shutdown of Nu Skin’s Chinese pyramid scheme, profit plummeted by 63%.
The status of the SEC investigation, purportedly also looking into Nu Skin’s Chinese pyramid scheme operations, remains unclear.
In other Nu Skin news, the company recently lost an appeal in Japan over a customs dispute.
Following the loss in court, Nu Skin are now liable for around $32 million dollars in customs duties.
Update 17th October 2016 – Last Thursday Nu Skin’s proposed $47 million dollar settlement was approved.