Last week, Usana Health Sciences (NASDAQ: USNA) announced that the SEC dropped its informal investigation into the company. Immediately, there was a nice short squeeze. But since then, the stock has been on a downward trend.

My opinion on this? I think that Cheating in China is still a big issue. I’m not sure that the SEC is interested in this issue right now, but someone is. And frankly, Usana hasn’t answered questions about why their management employees in China are breaking the law and showing potential distributors how to break the law.

I think this issue is still a big problem, and that’s why the stock is languishing this week. So how does this get resolved? I think Bradford Richardson, Usana’s Executive VP of Asia Pacific is going to take the fall for the company. It looks like he’s sold off all his shares of Usana and with money in pocket, will leave quietly. Expect a big announcement before the next conference call, that way Gil and Dave can spend part of the conference call raving about how high their ethics are.

And my guess is that Richardson is going to be hired by Shaklee. But don’t ask me why I think that.

Chart below (click on it to see it full size).