Natural Health Trends Corp.

Robbins Arroyo LLP: Natural Health Trends Corp. (NHTC) Misled Shareholders According to a Recently Filed Class Action

Robbins Arroyo LLP announces that a class action complaint was filed in the U.S. District Court for the Central District of California. The complaint alleges that officers and directors of Natural Health Trends Corp. (NASDAQCM: NHTC) violated the Securities Exchange Act of 1934 between March 6, 2015 and January 12, 2016, by making materially false and misleading statements about Natural Health Trends’ business prospects. Natural Health Trends, a direct-selling and e-commerce company, provides wellness, beauty, and lifestyle products for consumers or business builders under the NHT Global brand name.

Natural Health Trends Accused of Hiding Investigation By Chinese Officials

According to the complaint, throughout 2015, Natural Health Trends filed a Form 10-K and several Forms 10-Q with the U.S. Securities and Exchange Commission, stating that the company’s Chinese entity was operating in compliance with applicable Chinese laws. However, the complaint alleges that Natural Health Trends officials failed to disclose that its Chinese entity was not in compliance with Chinese laws.

On January 7, 2016, Seeking Alpha published a post indicating that an investigative report published in China revealed that the company is being investigated by Chinese authorities. Then, on January 11, 2016, the company issued a press release stating that although it had heard of an online posting alleging a government investigation, it was unaware of such an investigation. The same day, analyst firm GeoInvesting LLC issued a report about the company. According to the report, a neighboring office employee stated that uniformed authorities visited Natural Health Trends’ Beijing office around Christmas and seized property, and this visit corroborates the Seeking Alpha post that it is under investigation for running an illegal multi-level marketing business in China. The report further stated that on December 28, 2015, the company posted a special notice on its website warning its distributors to stop using its name, and on January 8, 2016, announced the temporary suspension of its distributor website for maintenance. On January 12, 2016, GeoInvesting issued another report about the company asserting that news broke on several reputable Chinese media sites claiming the company had been raided and was under investigation. Since news broke of the alleged investigation by Chinese authorities, Natural Health Trends stock fell $9.85 per share, or nearly 34%, to close at $19.18 per share on January 12, 2016.

Natural Health Trends Shareholders Have Legal Options

Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.

 

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