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On the Wednesday before Thanksgiving, the FDA gave the owners of ATF Fitness Products, Inc. (ATF) and Manufacturing ATF Dedicated Excellence, Inc. (MADE) little to be thankful for. On that day, the Justice Department, on behalf of the FDA, filed legal action against the Oakmont, Pennsylvania companies seeking a permanent injunction that would stop them from manufacturing and distributing over 400 different dietary supplement products.
The action was based on alleged violations by ATF and MADE of the current Good Manufacturing Practice (cGMP) regulations for the manufacture of dietary supplements. According to the Complaint filed by the Justice Department, ATF is the sole distributor of dietary supplement products manufactured by MADE. Also named in the complaint is James G. Vercelotti, the owner and operator of both entities.
Under the cGMPs for dietary supplements (found at 21 C.F.R. § 111), dietary supplements must be manufactured according to processes that incorporate controls in the design and production process to assure a quality finished product. The purpose of the cGMPs for dietary supplements is to ensure quality and safety. According to the Complaint, ATF and MADE failed to adhere to the cGMPs in the manufacture of over 400 dietary supplement products. The Complaint alleges a number of deviations from the cGMPs at pages 3 through 5 of the Complaint. You can access the Complaint here.
In addition to the alleged deviations from the cGMPs, the Complaint alleges that the defendants misbranded their dietary supplement products by substituting ingredients for those listed on the product labels. Finally, the Complaint alleges that the defendants failed to submit Serious Adverse Event reports to the FDA as required by the Dietary Supplement and Nonprescription Drug Consumer Protection Act (21 U.S.C. §§ 379aa – 379aa-1). As an example of this failure, the Complaint alleges that the defendants received a report of a serious adverse event from a consumer who claimed that one of their products caused a high blood pressure spike requiring hospitalization and subsequently caused a mild heart attack. The defendants failed to submit a report of this event to the FDA as required by the Act.
According to the press release issued by the FDA, this is the first time that the agency has sought a permanent injunction against a dietary supplement manufacturer of this size.
The FTC’s charges against three people and two companies charged with deceptive advertising of hoodia as a weight loss has resulted in a settlement where one defendant is banned from making any weight-loss claims related to foods, drugs, or dietary supplements and must turn over a vacation home and other assets to the FTC; another is banned from the dietary supplement business altogether; and all defendants are barred from making any more deceptive claims.
The FTC’s 2009 complaint alleged that the defendants made false and deceptive claims about hoodia and its effectiveness as a treatment for obesity, and falsely claimed that their ingredient was hoodia when it was not. The complaint also alleged that they falsely and deceptively claimed their product was, among other things, scientifically proven to suppress appetite, resulting in weight loss and was clinically proven to reduce caloric intake by 1,000 to 2,000 calories per day.
- David J. Romeo, and two companies he controlled, Nutraceuticals International LLC and Stella Labs LLC, are banned from making any weight-loss claims while marketing foods, drugs, and dietary supplements. The settlement imposes a $22.5 million judgment against Romeo and the two companies, which will be suspended when Romeo forfeits his vacation home in Vermont, and assigns to the FTC the right to collect on $635,000 in business loans owed to him. If it is later determined that the financial information Romeo gave the FTC was false, the full amount of the judgment will become due.
- Nutraceuticals International principal Craig Payton is banned from marketing any foods, drugs, or dietary supplements.
- Nutraceuticals International marketing executive Deborah B. Vickery is required to pay a $4 million judgment, which has been suspended due to her inability to pay..
- All five defendants are prohibited from making any false or unsupported claims about foods, drugs, or dietary supplements, and from helping others to make these claims. They also are barred from misrepresenting the results of any scientific study.
The settlement bars Google from future privacy misrepresentations, requires it to implement a comprehensive privacy program, and calls for regular, independent privacy audits for the next 20 years. This is the first time an FTC settlement order has required a company to implement a comprehensive privacy program to protect the privacy of consumers’ information.
The SEC is now investigating Avon in connection with allegations of bribing foreign officials that have been the subject of an internal Avon investigation disclosed in a 10-Q filing last May.
According to The Guardian, Avon’s recent regulatory filing disclosed that “a formal order of investigation” by the SEC was underway. The filing said the SEC was investigation Avon under the Foreign Corrupt Practices Act which makes it illegal U.S. firms to bribe foreign officials.
The SEC also is investigating Avon’s contacts with financial analysts in 2010 and 2011.