Natural Health Trends Corp. (NHTC) Accused of Being a Pyramid Scheme

According to the complaint against the company's officers and directors for alleged violations of the Securities Exchange Act of 1934 between April 27, 2016 to January 5, 2019, Natural Health Trends Corp. (NASDAQ: NHTC) filed Forms 10-Ks and 10-Qs stating that the company's Chinese entity was operating in compliance with applicable Chinese laws. However, on January 7, 2019, GeoInvesting reported that China Central Television, a prominent state broadcaster, aired an exposé asserting that the company was operating as a pyramid scheme. An expert on the CCTV program claimed that Natural Health Trends was a pyramid scheme because it makes money by recruiting members. Furthermore, the program claimed that one of its products, Noni Juice, did not have domestic approval and registrations related to wellness foods. When this news broke, Natural Health Trends stock fell $4.89 per share, or over 24%, to close at $14.88 per share on January 7, 2019.

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