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PROVO, Utah (AP) -- A class-action lawsuit alleging insider trading and securities fraud by several top executives of Nature's Sunshine Products Inc. has been settled for $6 million, company officials said.
The executives of the Provo nutritional supplements maker were accused of violating federal securities laws by falsifying financial statements to auditors and federal regulators, costing shareholders millions of dollars.
According to the suit, the bogus statements enabled the defendants to sell millions of dollars worth of stock between April 2002 and April 2006 at artificially inflated prices.
Named were President and CEO Douglas Faggioli, former CFO Craig Huff and Franz Cristiani, former chairman of the audit committee.
In agreeing to settle, the company denied any wrongdoing.
Under the settlement announced Friday, the company's insurer will pay $6 million plus interest to affected shareholders.
Phillip Kim, the lead attorney for the shareholders, said he couldn't immediately specify the size of the settlement class until all shareholders have submitted their claims.
"It's a positive settlement because it gives shareholders immediate recovery and eliminates the risks of continuing with further litigation," he told the Provo Daily Herald.
A hearing will be held Feb. 9 to determine if the settlement should get final court approval.
Eligible shareholders are facing a Jan. 19 deadline to submit their claims for reimbursement and a Jan. 26 deadline to file any objections to the settlement.
The company regained its Nasdaq listing on Oct. 12 after three years of trading on over-the-counter "pink sheets."
Nature's Sunshine earnings returned to the black in its fiscal third quarter ending Sept. 30 due in part to its reduced expenses.
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Information from: The Daily Herald
(Copyright 2009 by The Associated Press. All Rights Reserved.)
