The Idaho Department of Finance has won...
The Idaho Department of Finance has won a court injunction against Omni Pharmaceuticals Inc. of Brea, permanently preventing the company from giving away deeply discounted $1,000 bonds to promote telephone sales of its vitamins.
According to Gavin Gee, chief of the department’s securities bureau, Omni offered zero-coupon bonds as “come-ons” to buyers of its vitamins. However, Gee said the bonds were unregistered and Omni was not authorized to sell such securities in Idaho.
Gee said the bonds offered by Omni do not reach their $1,000 face value for 15 to 30 years. Because a zero-coupon bond does not provide the holder with regular interest payments, the market price is often substantially below the bond’s face value.
Omni President Gary Allan could not be reached for comment Thursday, but a spokeswoman for the company said he was unaware of the Idaho charges.
Idaho Finance Director Thomas McEldowney said that the permanent injunction was signed on Wednesday and that Omni consented to it without admitting or denying the state’s allegations.