Nu Skin agreed to pay $47 million to settle a class-action lawsuit filed by shareholders who accused the company of lying to investors about its Chinese operations.

The lawsuit, filed in February 2014, stemmed from Chinese media reports in January that year alleging Nu Skin was running a pyramid scheme. Chinese authorities investigated and fined the company $781,000. Now, after two years of litigation, Nu Skin's insurers will cover the settlement, meaning no direct hit to the company's bottom line, according to a company filing.

The deal still needs court approval, with final clearance expected in mid-2016. Once approved, it would end the class-action case, though the broader fallout for Nu Skin's global operations remains unclear.

The Chinese pyramid scheme scandal hit the company hard. After Chinese authorities shut down those operations, Nu Skin's profit nosedived 63 percent. Meanwhile, an SEC investigation into the same issue continues, its status unknown.

The company's troubles didn't stop in China. Nu Skin recently lost an appeal in Japan over a customs dispute, landing the company a $32 million bill in duties.

By October 2016, a federal judge approved the $47 million settlement.

🤖 Quick Answer

What was the amount of the settlement that Nu Skin agreed to pay?
Nu Skin agreed to pay $47 million to settle a class-action lawsuit filed by shareholders who alleged the company misrepresented its Chinese operations to investors.

What triggered the lawsuit against Nu Skin?
The lawsuit stemmed from Chinese media reports in January 2014 alleging Nu Skin operated a pyramid scheme, leading to investigation by Chinese authorities who subsequently fined the company $781,000.

Who covered the settlement costs for Nu Skin?
Nu Skin's insurance carriers covered the settlement amount, preventing any direct financial impact on the company's financial results according to corporate filings.

When was final court approval expected for the settlement?
Final court approval for the settlement was expected in mid-2016, which would terminate the class-action case although broader implications for Nu Skin's international operations remained uncertain.

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