According to the Form 10-K for the fiscal year ended September 30, 2002, the consolidated case was dismissed by the court on September 28, 2002, and then formally closed on October 31, 2002.
The original complaint charges defendants with violations of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that the defendants issued materially false and misleading information regarding NBTY's financial condition and prospects, including that the Company was immune to industry-wide, negative trends. The complaint also alleges that defendants failed to disclose material information, including that sales at the Company's Vitamin World stores were declining, that fluctuations in the British Pound would negatively impact the results of the Company's U.K. Holland Barrett stores, and that the Company's "vertical integration" strategy (acquiring nutritional supplement companies in different segments of the supplement business) had not yielded any positive results. The dissemination of this materially misleading information and the failure to disclose material information caused NBTY's common stock to be artificially inflated throughout the Class Period. NBTY insiders took advantage of the inflated price of NBTY stock to sell $32.9 million worth of their own shares to unsuspecting investors. When the truth about NBTY 's financial condition was revealed to the investing public, NBTY 's stock price plummeted to $7.06125 per share from $11.06125 on June 15, 2000.