NBTY, Inc., a/k/a Nature's Bounty, is a manufacturer and marketer of nutritional supplements.

The original Complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Complaint asserts that the Company issued false and misleading statements concerning its financial results for the quarter ending March 31, 2004. On April 22, 2004, NBTY announced increased sales in that quarter for its various business segments, including its Direct Response segment, which sells products through catalogs and the internet. The increased sales were attributed to "the Company's ability to more effectively target market its customer base." In truth, the results were due to special sales promotions, and not any generalized improvement in the Company's marketing abilities. Indeed, it is alleged that in the month of April sales in this segment dropped off 14% because the special promotion had ended. Before this decline was revealed to the public, Defendant Rudolph sold 400,000 shares for proceeds of over $14 million, while Defendant Kamil sold 157,000 shares for proceeds of over $6 million.

On June 17, 2004, NBTY shocked investors by announcing sales declines in the Direct Response segment of 12% for the months of April and May, sending shares plunging from a close of $36.50 the previous day to $26.99 on trading volume of 8.3 million shares.

According to the Company’s FORM 10-Q for the quarterly period ended June 30, 2006, during the period from June 24, 2004 through September 3, 2004, six separate shareholder class-actions were filed against the Company and certain of its officers and directors in the U.S. District Court for the Eastern District of New York, on behalf of shareholders who purchased shares of the Company’s common stock between February 9, 2004 and July 22, 2004 (the “Class Period”). The actions allege that the Company failed to disclose material facts during the Class Period that resulted in a decline in the price of its stock after June 16, 2004 and July 22, 2004, respectively. The Court consolidated the six class-actions in March 2005 and appointed lead Plaintiffs and Counsel. The lead Plaintiffs filed a consolidated amended Complaint alleging an amended class period from November 10, 2003 to July 22, 2004. Along with the officers and directors, the Company filed a motion to dismiss the action. The motion was denied on May 1, 2006, and discovery commenced.

The parties entered into a Stipulation and Agreement of Settlement on April 4, 2007. The Court granted preliminary approval of the Settlement on May 2, 2007. On August 20, the Court granted final approval of the Settlement, including an award of Attorneys’ Fees and Expenses, and entered Final Judgment.