Vital Living Faces Fraud Charges
MATTHEWS, N.C – A Matthews company that had planned to manufacture home anthrax-testing kits is under investigation by various law enforcement agencies and may go out of business.
The Securities and Exchange Commission told Vital Living that it plans to file a civil enforcement action against the company for allegedly violating securities laws. The company also said it is being investigated for insider trading.
Fighting the charges could mean the already financially troubled company would have to shut down, the company said.
Vital Living caught national attention soon after the first mail-borne cases of anthrax were detected by announcing it would sell the first over-the-counter anthrax test kit by Thanksgiving.
The company said it had received more than $150,000 worth of orders by early November, but stopped marketing the product on Dec. 1, a day after the FBI raided its offices and a related New Jersey lab.
The company's stock, which had been trading at 5 cents on Oct. 1, rose to a high of $2.03 on Oct. 23. It closed last week at 16 cents.
The agencies listed as investigating Vital Living include: the SEC, the National Association of Securities Dealers, the Federal Trade Commission, the U.S. Attorney's office for the southern district of New York and the N.C. Department of Justice's Consumer Protection Division.
Vital Living is negotiating with the FTC for a possible out-of-court settlement.