Shareholders of a nutrition company recently requested that a law firm look into potential federal securities violations, and this process may result in a class action lawsuit.
The law office of Bronstein, Gewirtz and Grossman noted that it is looking into claims related to Herbalife, Ltd., after stockholders noted potential issues regarding business dealings.
On Jan. 23, 2014, Massachusetts Sen. Edward Markey noted that he contacted the Federal Trade Commission, the Securities and Exchange Commission and Herbalife itself in order to gain more information about the company's business practices.
"There is nothing nutritional about possible pyramid schemes that promise financial benefit but result in economic ruin for vulnerable families," said Markey. "Herbalife may be a purveyor of health and wellness products, but some of its distributors are suffering serious economic ill-health as a result of their involvement in the company. I have serious questions about the business practices of Herbalife and their impact on my constituents, and I look forward to receiving responses to my inquiries."
Once this information surfaced, the company saw its stock drop to $65.92 per share on Jan. 23, which was a 10.35 percent – or $7.61 – decline.
Shareholders who have questions about this investigation are encouraged to speak with the firm, while those who may have information that could facilitate the process are also urged to come forward. Both Eitan Kimelman and Peretz Bronstein are available to be contacted, and they can both be reached by email or telephone. Those who choose to get in touch through email should leave their mailing address and telephone number.
Separate law firm begins investigation
Another law office is seeking information regarding many of the aforementioned issues. This has the potential to become a class action claim.
Pomerantz, LLP, noted that it began an investigation of Herbalife due to Markey's statement and actions. Through this process, the law firm will work to determine if the company violated the Securities Exchange Act of 1934, specifically Sections 10(b) and 20(a).
Another measurement of the company's stock decline after the announcement was that it fell to $65.28 per share on Jan. 22, which was more than 11.2 percent less than the previous level.
In order to learn more about this investigation, shareholders were encouraged to get in contact with the law firm. Robert Willoughby is available to field questions, and can be reached by telephone or email.