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SALT LAKE CITY (AP) -- The state ordered two companies to not do business in Utah, citing their failure to disclose financial records.
iMergent and its subsidiary, StoresOnline, have argued they are not required to disclose the information and don't do business in Utah, anyway. The Orem-based companies offer software and help setting up online home businesses.
The Utah Commerce Department issued its decision Tuesday, but said it was suspending the stop order and a $2,500 fine until the companies finish an administrative appeal.
Utah is the latest state to threaten a crackdown on StoresOnline, which has been accused of using deceptive practices at seminars where it offers moneymaking opportunities. Most recently, North Carolina on May 16 told the companies to stop doing business in that state pending a court fight. iMergent, a holding company, and the subsidiary agreed to issue refunds to North Carolina residents who filed complaints saying they lost money.
Jeffrey Korn, general counsel for iMergent, said StoresOnline doesn't have to comply with Utah's disclosure requirements because it doesn't provide any products for resale or guarantee customers' profits. It doesn't even sell the software used to develop interactive Web-based businesses in Utah, he said.
"There's no effect this order," Korn said Tuesday. "This could be appealed for years."
In legal papers, state officials accused iMergent and StoresOnline of violating the Utah Business Opportunity Disclosure Act.
That law requires some companies to make regular disclosures of company finances and business dealings. According to the law, iMergent would have to disclose copies of marketing plans, the number it sells and how many are terminated or refunded, among other information.
Shares of iMergent closed at $23.20, a 5.5 percent drop, Tuesday.
(Copyright 2007 by The Associated Press. All Rights Reserved.)