GNC Holdings Inc (NYSE:GNC) Investor Investigation Concerning Potential Breaches Of Fiduciary Duties Announced

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Company Name(s): 
GNC Holdings
Affected Securities: 

October 23, 2015 (Shareholders Foundation) - An investigation on behalf of current long-term investors in shares of GNC Holdings Inc (NYSE:GNC) was announced over potential breaches of fiduciary duties by certain officers and directors at GNC Holdings.

The investigation by a law firm concerns whether certain GNC Holdings officers and directors breached their fiduciary duties and caused damage to the company and its shareholders.

GNC Holdings Inc reported that its annual Total Revenue declined from over $2.62 billion in 2013 to over $2.61 billion in 2014 and its Net Income decreased from $265.02 million in 2013 to $255.87 million in 2014.

On February 3, 2015, the New York Attorney General Eric Schneiderman announced that his office sent letters to four major retailers, GNC Holdings Inc, Target, Walmart, and Walgreens, for allegedly selling store brand herbal supplement products in New York that either could not be verified to contain the labeled substance, or which were found to contain ingredients not listed on the labels. The letters, sent Monday, call for the retailers to immediately stop the sale of certain popular products, including Echinacea, Ginseng, St. John’s Wort, and others. Shares of GNC Holdings Inc (NYSE:GNC) declined to as low as $41.43 per share on February 3, 2015.

On February 4, 2015, GNC Holdings Inc announced that it will voluntarily comply with the New York State Attorney General's letter of February 2 by temporarily removing from its stores in New York the product lots cited in the letter.

On October 22, 2015, the State of Oregon sued GNC Holdings Inc, claiming that the company's nutritional and dietary supplements are laced with unapproved drugs, including picamilon and BMPEA.
According to the complaint GNC Holdings Inc violated the Oregon Unlawful Trade Practices ACT (“UTPA”) by misrepresenting some of its products as lawful dietary supplements. The complaint alleges that certain products that were misrepresented are unapproved drugs that may not be lawfully sold in the United States as a dietary supplement. In addition, the complaint alleged that GNC Holdings Inc sold products labeled containing botanical acacia rigidula that were added with unlabeled BMPEA and that GNC Holdings Inc allegedly sold thousands of units of products containing picamilon or BMPEA that were falsely labeled as a dietary supplement.

On the sam day, GNC Holdings Inc responded to the claims made by theOregonAttorney General and issued a statement saying that the claims made by the Oregon Attorney General are without merit andGNC Holdings Inc intends to vigorously defend against these allegations.
GNC Holdings Inc also said that in response to FDAstatements regarding the regulatory status of BMPEA and picamilon, GNC Holdings Inc promptly took action to remove from sale all products containing those ingredients.

Shares of GNC Holdings Inc (NYSE:GNC) declined to as low as $31.94 per share on October 22, 2015.