China fines NU Skin for misleading customers

The Chinese government fined NU Skin Enterprises (NUS.NYSE) US$540,000 for misleading customers on the benefits of its products, Reuters reported. The State Administration for Industry and Commerce (SAIC) also stated on its website that the company had sold items outside the permitted range, a charge related to pyramid selling where members make more from recruitment than actual product sales. The statement dragged down NU Skin’s shares on Monday. Six sales staff will also face individual fines totaling US$240,000. SAIC also noted that it would strengthen direct sales regulation.