This week, it was announced that Usana Health Sciences (NASDAQ:USNA) and Fraud Discovery Institute had reached a settlement in their legal battle. Usana basically had most of its case thrown out by a federal judge, but still could have pursued allegations of illegal manipulation of the stock.
The most interesting thing about the whole case against Barry Minkow and FDI is that Usana repeatedly called the report issued by Barry “false and misleading.” Yet the company never addressed any of the substantive allegations in the report or proved that they were incorrect. And no one held their feet to the fire and demanded that they prove that what he said was false.
Yet a business decision was made by both sides of the case to settle, and according to the Associated Press:
USANA will withdraw its lawsuit against Minkow and his Fraud Discovery Institute in the U.S. District Court for the district of Utah. In turn, Minkow and the Fraud Discovery Institute will not trade in USANA’s stock, will remove information within their control regarding USANA from the Internet, and will not publish any further statements about USANA.
Usana paid Minkow $200,000 to settle, and Usana has basically accomplished their main goal: To stop a man who has uncovered billions of dollars of fraud at other companies from talking about them. Why? Because he’s obviously so on-the-mark with what he says that they’re scared.