Natural Health Trends Announces Completion of SEC Investigation With No Enforcement Action Taken Against the Company
SEC Settles Civil Action Against Former Officers
DALLAS, TX -- (MARKET WIRE) -- 09/15/08 -- Natural Health Trends Corp. (NASDAQ: BHIP), an international direct-selling and e-commerce company, announced today that the Securities and Exchange Commission has completed a previously disclosed investigation of the Company and others that was initiated in October 2006. The SEC's staff notified the Company by letter dated September 12, 2008, that they do not intend to recommend any enforcement action against the Company.
The investigation did result in a civil enforcement action by the SEC against two former officers of the Company, Mark Woodburn and Terry LaCore, who were charged with securities fraud and other violations arising from undisclosed related party transactions. Mr. Woodburn is a former president, director and chief financial officer of the Company, and Mr. LaCore is a former director of the Company and the former chief executive officer of NHT Global, Inc., a subsidiary of the Company. In late 2005, Mr. Woodburn and Mr. LaCore resigned as officers and directors, and the Company terminated their employment, in connection with an independent investigation by the Company's Audit Committee.
The SEC's complaint against Woodburn and LaCore alleged that they had received approximately $2.5 million in undisclosed payments from the Company's top distributor from 2002 through August 2005. The complaint also alleged that Woodburn took steps to conceal the related-party nature of a loan he caused the Company to make to a family-controlled entity when the loan was discovered by the Company's new accounting management in the fall of 2004. The complaint alleged that the activities of Woodburn and LaCore resulted in the Company's failure to disclose, or adequately disclose, the related party transactions in periodic filings, registration statements, and proxy statements.
On September 4, 2008, the SEC announced that Woodburn and LaCore agreed to settle the SEC's charges without admitting or denying the allegations of the complaint. Woodburn and LaCore each agreed to be permanently enjoined from violating certain anti-fraud and other securities laws and to a five-year officer and director bar. In addition, Woodburn and LaCore each agreed to pay a monetary civil penalty.
"Current management of the Company worked diligently to fully cooperate with the SEC in its investigation," said the Company's President, Chris Sharng. "We are pleased that no enforcement action has been recommended against the Company, and we look forward to continuing to focus on our business with this investigation behind us," added Mr. Sharng.
About Natural Health Trends
Natural Health Trends Corp. is an international direct-selling and e-commerce Company operating through its subsidiaries throughout Asia, North America, and Europe. The Company markets premium quality personal care products under the NHT Global brand. Additional information can be found on the Company's website, and management encourages interested parties to register for updated corporate information via email on the Company's home page, www.naturalhealthtrendscorp.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Forward-looking statements in this release do not constitute guarantees of future performance. Such forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. Such risks and uncertainties include the risks and uncertainties detailed under the caption "Risk Factors" in our Annual Report on Form 10-K filed on March 31, 2008, with the Securities and Exchange Commission. We assume no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.
Contact: Jean Bono Natural Health Trends Corp. Email Contact
Released September 15, 2008