NuSkin Settlement Reached With SEC Over Allegedly Improperly Handled Charitable Donation In China

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NuSkin has announced today that it has reached an agreement with the SEC in relation to its controversial charitable contribution in China in 2013. The company also forecasted Q3 guidance to be at the high end of its previously guided range. That is $560 million to $580 million in sales. The NuSkin settlement of just over $750,000 with the SEC is in relation to the payment and lack of internal controls surrounding the accounting for the supposed donation. As expected, the company neither confirmed nor denied responsibility for the accusations leveled by the SEC in this matter.

NuSkin Settlement
Photo of a typical NuSkin store in the mall

NuSkin Settlement Reached

NuSkin stock is trading up on this news in the after hours session. It is worth noting that in February the company paid $47 million to settle a lawsuit that alleged that the company was running a pyramid scheme in China and made false and misleading statements about its operations.

NuSkin makes products like the Angeloc – which was reviewed by Brandon here. I remember my friend’s mother pushing NuSkin products when I was a kid. The company has been around forever and operates using multi level marketing. It is exactly like Avon or Herbalife. The products are considered to be pretty decent and have a good price point.

Distributing products by multi level marketing can be tricky but extremely profitable. The set up required is difficult and requires a strong legal framework and many contracts. The actual practice of multi level marketing is subject to various laws. These laws vary by region and jurisdiction.

NuSkin sales are good and that has never been the company’s problem. It seems to always be playing a cat and mouse game with regulators. It is however a remarkable story with a history of legal problems. It was founded in Utah in 1984 and went public shortly after. The company also owns the Pharmanex brand. I plan to be covering the company in more detail shortly.

NuSkin Settlement Reached With SEC Over Allegedly Improperly Handled Charitable Donation In China
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Charles Moscoe

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Charles Moscoe is the Editor in Chief of SkinCare.net. He is an experienced beauty consultant and financial journalist with nearly 20 years of publishing experience.

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