Quote Originally Posted by littleroundman View Post
Nu Skin Provides Update on China Regulatory Reviews



PROVO, Utah, March 24, 2014 /PRNewswire/ -- Nu Skin Enterprises, Inc. NUS -0.12% today provided an update on the regulatory reviews conducted by the Administration of Industry and Commerce ("AIC") in Shanghai, where its China business is headquartered, and the AIC in Beijing, where the company maintains a branch office. These reviews were conducted under the direction of China's State AIC.

As a result of the reviews, Nu Skin China was penalized in the amount of US $524,000 (RMB 3.26 million) for the sale of certain products by individual direct sellers that, while permitted for sale in Nu Skin China's retail stores, were not registered for the direct selling channel. Nu Skin China was also fined US $16,000(RMB 100,000) for product claims that were deemed to lack sufficient documentary support. The company understands that six of its sales employees have been fined for unauthorized promotional activities in an aggregate amount of US $241,000 (RMB 1.50 million). In addition, Nu Skin China was asked to enhance the education and supervision of sales representatives. The company is already taking steps to correct the issues raised in the AIC reviews, and is not aware of any other material enforcement investigations currently pending in China.

As announced on Jan. 21, 2014, Nu Skin China voluntarily suspended business promotional meetings and applications for new sales representatives to fully cooperate with the regulatory reviews. The company is working diligently to enhance sales representative training and supervision, and will seek direction from the Chinese government with respect to resuming normal business activities.

"We continue to believe in the potential of China's large and growing market," said Dan Chard, president of global sales and operations. "We remain committed to working cooperatively with the Chinese government to ensure the healthy, long-term growth of our business."

(The entire Nu Skin PR release can be read HERE)

[Highlighting of penalties added by author]
When I was looking at that, I thought it was a pretty small fine. Apparently investors agree:

"Shares of Nu Skin have gained 19% to $89.12 at 10:36 a.m. today and the news is also giving a boost to other multi-level sellers. Shares of Usana Health Sciences (USNA) have risen 6.1% to $70.77, while Herbal (HLF) has advanced 4.8% to $51.91 after Carl Icahn added three members to the company’s board."
Nu Skin: You Call That a Fine? - Stocks To Watch - Barrons.com

Considering this part of your original post:

"The company said that in addition to fines, it could potentially face sanctions in China, such as a formal suspension of its ability to recruit new sales people and a temporary suspension of its right to sell products in various markets."
...it makes me wonder if investors don't really believe that they'll face those sanctions.