Herbal Supplement Makers Plunge On Possible DoJ Charges

(RTTNews) - The Department of Justice and other federal agencies will announce actions against dietary supplements on Tuesday afternoon.

Witout specifying any particular company, the DoJ tweeted "Today, 3:30pm: @theJusticeDept & Federal Partners to Make Announcements in Dietary #Supplement Cases ? http://www.justice.gov/live-stream"

Federal authorities are expected to announce criminal and civil actions regarding dietary supplement sales and illegal advertisements.

Following the news, shares of GNC Holdings Inc. (GNC) plunged 25 percent, while shares Vitamin Shoppe Inc. (VSI) dropped about 8 percent and Herbalife Ltd. (HLF) slipped 3 percent.

Earlier this year, New York Attorney General Eric Schneiderman sent cease-and-desist letters to GNC, Target Corp. (TGT), Walgreens Boots Alliance Inc. (WBA) and Wal-Mart Stores Inc. (WMT), after a study failed to detect identifiable genetic material for the plants depicted on the labels in most of the four retailers' herbal supplement products.

GNC said in March that it reached a deal with the New York Attorney General's office that affirms that its Herbal Plus products were in full compliance with the FDA.

Last month, Oregon Attorney General filed lawsuit against GNC for selling nutritional and dietary supplements containing the illegal ingredients picamilon and BMPEA, not approved in U.S.

GNC is currently trading at $26.63, down $4.42 or 14.24%, on the NYSE.