Wakaya Perfection barred from pursuing insider trading discovery

In an attempt to support claims of misconduct as the reason affiliates left Youngevity for Wakaya Perfection, the latter began exploring rumors of insider trading.

These rumors were explored in depositions of Youngevity affiliates, during which Wakaya pressed them on

questions concerning securities laws of the United States or facts germane to whether any federal securities laws have been violated.

Youngevity wasn’t happy about this and filed for a protective order prohibiting Wakaya from further exploring the alleged violations.

Wakaya Pefection began exploring alleged insider trading violations during the deposition of Keith Halls, a Youngevity affiliate since 2013.

During Mr. Halls’ deposition, counsel for Wakaya, Michael Anderson, asked Mr. Halls numerous questions about an email chain between Mr. Halls and Dave Briskie, Youngevity’s President and Chief Financial Officer.

In addition to being a Youngevity affiliate, Halls is also a Youngevity shareholder and has “at unknown timed traded that stock”.

The deposition testimony and the email chain itself reflect that on February 27, 2016, Mr. Halls sent Mr. Briskie a draft report detailing Youngevity’s financial performance, which Mr. Halls intended to send to Youngevity distributors.

Mr. Halls prepared the report to allay distributor concerns following Wakaya’s announcement that the company was going public.

Mr. Briskie responded to Mr. Halls’ email, “If you want to lower your revenue estimate to 155 Million for 2015
we will likely beat that number when our filings come out.
”

Mr. Halls then updated his report, seemingly to reflect Mr. Briskie’s number.

Following this conversation, Mr. Halls sent the report to some of his downline Youngevity distributors.

The information in the report was later published as a blog post dated March 1, 2016 and was available to the public.

Wakaya Perfection’s attorney went on to question Halls about insider trading.

When asked if he was “aware that insider trading includes communicating material, nonpublic information, to others?”, Halls invoked his Fifth Amendment right against self-incrimination.

The Fifth Amendment was again used in response to the allegation that Briskie’s communication constituted non-public information and thus insider trading took place.

Youngevity’s attorneys objected to the questioning during the deposition and after the second Fifth Amendement response, instructed Halls ‘
not to answer any further questions relating to inside trading
‘.

After the deposition Youngevity filed for a protective order and sactions against Wakaya Pefection’s attorney.

While the motion was pending Wakaya Perfection deposed Dave Briskie and Tom Chenault, both of whom were also asked about insider trading.

In their motion,

Youngevity argues that alleged instances of insider trading are wholly irrelevant to both parties’ claims.

Indeed, neither Wakaya Perfection or Youngevity had brought up insider trading (allegations or otherwise) up until

🤖 Quick Answer

What legal action did Youngevity take in response to Wakaya Perfection's insider trading investigation?

During which affiliate's deposition did Wakaya Perfection begin exploring insider trading allegations?
Wakaya Perfection initiated its insider trading investigation during the deposition of Keith Halls, a Youngevity affiliate employed since 2013, with attorney Michael Anderson directing questioning about relevant securities documentation.

What was Wakaya Perfection's stated rationale for investigating insider trading claims?
Wakaya Perfection pursued insider trading discovery to support allegations of misconduct as justification for why affiliates departed from Youngevity to join their company.

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