A three-year-long class action lawsuit alleging insider trading and securities fraud by several top executives of Nature's Sunshine Products Inc. was settled for $6 million, company officials announced Friday.

The Provo nutritional supplements direct-seller and several executives including President and CEO Douglas Faggioli, former CFO Craig Huff and Franz Cristiani, former chairman of the audit committee, were accused of violating federal securities laws when they falsified financial statements to its auditors and federal regulators, costing shareholders millions of dollars in damages.

The suit said the bogus statements enabled the defendants to sell millions of dollars worth of stock between April 23, 2002, and April 5, 2006, at artificially inflated prices.

In agreeing to settle, the defendants denied any wrongdoing.

Under the settlement, Nature's Sunshine's insurer will pay $6 million plus interest to individuals who bought the company's common stock between April 2002 and 2006.

In exchange, the lawsuit will be dismissed with prejudice, meaning shareholders who accept the settlement have to agree not to continue suing the company.

Each shareholder's portion of the $6 million fund will depend on the number of claims filed, the dates and prices at which Nature's Sunshine stock was bought and sold between April 2002 and 2006, the amount of administrative costs, and the amount awarded for attorneys' fees and costs.

Eligible shareholders should submit their claims by Jan. 19, 2010, to receive reimbursement, or file their objections to the settlement by Jan. 26 if they disagree with the terms.

Phillip Kim, the lead attorney for the shareholders, said he couldn't immediately specify the size of the settlement class until all the shareholders have submitted their claims.

"It's a positive settlement because it gives shareholders immediate recovery and eliminates the risks of continuing with further litigation," he said.

A hearing will be held Feb. 9, 2010, to determine if the settlement should get final court approval, and how much in attorneys fees and costs should be awarded. The shareholders' attorneys are asking for fees and costs of up to one-third of the $6 million settlement, or up to $250,000 and incentive awards of up to $1,500 for each of the shareholders.

The insider trading settlement comes two years after U.S. District Judge Ted Stewart nixed the company's efforts to dismiss the lawsuit. In July, Nature's Sunshine paid $600,000 in civil penalties, and Faggioli and Huff each paid $25,000 to settle charges that its Brazilian unit bribed Brazilian officials so it could bring in nutritional supplements after changes in the country's food regulations.

The company regained its listing on Nasdaq on Oct. 12 after three years of trading on over-the-counter "pink sheets" since April 2006.

Nature's Sunshine's earnings returned to the black in its fiscal third quarter ended Sept. 30 due in part to its reduced expenses. The company on Friday reported net income of $2.1 million, or earnings per share of 13 cents, compared with net losses of $200,000, or loss per share of 1 cent, in the same period a year ago.

"Selling, general and administrative expenses declined as a percentage of net sales revenue, reflecting reduced professional fees and our increased emphasis on cost containment," Faggioli said in Friday's report.

For the third quarter, its net sales revenue totaled $85.8 million, down 7.4 percent from $92.7 million a year ago because of the global economic downturn and unfavorable currency fluctuations.

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• Nature's Sunshine pays $600K to settle bribery charges