U.S. officials announced a broad range of actions against nutritional supplement companies Tuesday, alleging some made deceptive claims about the effectiveness of their products.
Shares of GNC (GNC), Vitamin Shoppe (VSI) and Herbalife (HLF) all fell earlier in the day after federal agencies, including the Department of Justice, Federal Trade Commission and Food and Drug Administration, announced they would release results of an investigation. However, none of those companies were implicated in the probe, and their stocks gradually gained back some ground from the drop that hit the entire sector.
GNC plunged 22 percent at one point to a more than three-year low. It closed down 6.4 percent, while Vitamin Shoppe and Herbalife ended the day about 4.9 percent and 1.5 percent lower, respectively.
Among the actions, the Federal Trade Commission filed a lawsuit alleging Florida-based Sunrise Nutraceuticals made false assertions about a product, Elimidrol, which it advertised could help or even cure opiate withdrawal. In one testimonial cited by the FTC, a customers says, "I was introduced to Elimidrol and it saved my life."
The agency seeks to stop Sunrise from making the alleged claims about the supplement, which costs $75 per bottle, unless they are backed by "reliable scientific evidence.
In a statement, Sunrise said that it "admits no wrongdoing, but at this time is cooperating with the FTC and has chosen to discontinue its claims regarding symptoms of opiate withdrawal."
Officials announced additional actions and settlements against dietary supplement companies. The FTC will settle charges against three defendants involved in what it deemed a deceptive advertising campaign for weight-loss products, including W8-B-Gone, CITRI-SLIM 4 and Quick & Easy diet pills.
The agency also announced a deal to settle charges against companies and people involved in a plan to promote a supplement called Pure Green Coffee, which was touted as a weight-loss treatment.
The Justice Department also unsealed an indictment against USPlabs, which makes the workout supplement Jack3D.
USPlabs did not immediately respond to a request for comment.
— Reuters contributed to this report.
Correction: The Justice Department unsealed an indictment against USPlabs. An earlier version misstated the action by the agency.
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