Shares of GNC Holdings were trading down roughly 10.8 percent on Tuesday afternoon. Herbalife’s stocks lost more than 3.7 percent and Vitamin Shoppe, about 8 percent.
The declines followed the announcement that several U.S. federal agencies plan to pursue criminal and civil enforcement actions over the publicity and sale of dietary supplements.
A press conference is scheduled for Tuesday at 3:30 p.m. ET, in Washington, D.C.
Since no specific companies or individuals were singled out in the press release, the sector as a whole seemed to be reacting to the news.
Not The First
This is not the first investigation that companies in the industry have faced this year. A few months ago, GNC met scrutiny related to the ingredients it used in certain herbal supplements. The company said it had reached an agreement with the office of New York Attorney General Eric Schneiderman in March.
Last month, the state of Oregon also sued the company for the alleged use of illegal ingredients in its supplements.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
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