The deal sent the stock of the publicly traded, Utah-based, multilevel marketing company up 7.4 percent, finishing Monday at $31.53.

Barry Minkow's report that Usana's business model wasn't sustainable and that it overstated the quality and value of its products sparked a 15 percent drop in the company's stock price when it was released March 15, 2007. The stock, which traded above $60 in early 2007, continued to fall to a low of around $19 this past April before beginning a recovery.

Usana sued Minkow and his Fraud Discovery Institute in March 2007, claiming his allegations were false and that he was part of a larger effort to manipulate the stock price after he acknowledged he had taken a short position, meaning he had bet the company's stock would decline in value.

"I think this basically puts that whole issue to bed," said Doug Lane, an analyst with Jefferies & Co. "It seems like Usana has succeeded in getting the Fraud Discovery Institute to stop making negative comments about their business, to pull down from the Internet all commentary and to not trade in their stock anymore."

Usana declined a request for an interview with company officials about the settlement, saying in a written statement, "We are happy to achieve this result without the distraction of ongoing litigation."

Minkow, who served prison time in a stock manipulation case and then founded the Fraud Discovery Institute to ferret out corporate crime, said he settled the lawsuit so he could devote more time to other investigations he thinks have a greater importance than Usana.

"I think we made a good business decision here," said Minkow, adding that a confidentiality agreement prohibits him from discussing Usana.

Minkow's report alleged that although the company touted its potential for high levels of income for its distributors, it had a large turnover rate that made the company's business model unsustainable. In addition, he claimed that the company's products were comparable to those of more cheaply priced competitors.

The settlement announced Monday came just weeks after Usana board chairman Myron Wentz failed in his bid to take the publicly traded company private and then stepped down as CEO in favor of his son, David. Like the change of day-to-day leadership, the settlement appears to be an attempt to put a new face on the company as it moves ahead.

But Usana also was facing an uncertain outcome with the Minkow litigation. In March, U.S. District Judge Tena Campbell tossed out four Usana claims against him. That left only the company's charge that Minkow was part of a larger effort to profit from a drop in the company's stock price. But court documents showed that Usana never sued others who supposedly were part of the effort and it never asked for an injunction, its only avenue for relief in the case.

Analyst Lane maintains a "hold" recommendation on Usana stock. D.A. Davidson has a "buy," believing Usana is being undervalued by the market.

tharvey@sltrib.com