The class action was brought on behalf of purchasers of the common stock of NBTY, Inc. ("NBTY" or the "Company") (NYSE:NTY) between November 9, 2009 and April 26, 2010 (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act").
The complaint charges NBTY and certain of its officers and executives with violations of the Exchange Act. NBTY manufactures, markets, and retails nutritional supplements in the United States and worldwide.
The complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company's true financial condition, business and prospects. Specifically, the complaint alleges that defendants failed to disclose: (i) that the Company was experiencing a significant disruption in its private label business and a re-lated decrease in demand for its private label products; (ii) that the Company's advertising costs were escalating far in excess of the Company's internal forecasts; and (iii) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects.
On April 27, 2010, the Company issued a press release announcing its financial results for the fiscal second quarter of 2010, the period ended March 31, 2010. The Company announced that its private label sales accounted for only 38% of wholesale sales in the fiscal second quarter of 2010, compared to 42% of wholesale sales in the fiscal second quarter of 2009 - a decline of 4%. Moreover, according to the press release, net income was "adversely affected by the Company's increased television advertising to support its Nature's Bounty, Osteo Bi Flex, Ester C and Pure Protein brands."
In response to the unexpected rise in advertising costs and a slowdown of sales in its private label business, shares of the Company's stock fell $9.66 per share, or 21%, to close at $37.24 per share, on unusually heavy trading volume.
Plaintiff seeks to recover damages on behalf of all purchasers of the common stock of NBTY during the Class Period (the "Class").


