On September 29, 2025, the U.S. Court of Appeals for the Second Circuit revived a long-standing case against The Hain Celestial Group Inc. (Hain or the Company) and certain of its officers, reversing a district court’s previous dismissal and allowing the case to proceed into discovery.
Labaton Keller Sucharow serves as co-lead counsel in the case, which alleges that Hain, a manufacturer and seller of organic and natural food and personal care products, violated federal securities laws by concealing deteriorating demand from investors through a scheme designed to load Hain’s customers and distributors with excess product at the end of fiscal quarters. According to the suit, Hain “robbed Peter to pay Paul, cannibalizing future revenues to make present sales look more impressive” by offering valuable concessions to distributors at the end of each fiscal quarter to take more product than they could sell without adequately disclosing the practice or accounting for its financial implications to investors. These concessions included (1) cash incentives as high as $500,000 for a single distributor; (2) product discounts of up to 20%; (3) extended payment terms; (4) spoils coverage, or reimbursements for excess product that spoiled or expired; and (5) an absolute right to return unsold product.
The case further alleges that the Company repeatedly attributed its financial results to consumer demand and downplayed concerns about inventory levels without disclosing their reliance on the scheme.
Ruling in favor the plaintiffs in Gimpel v. Hain Celestial Group, No. 23-cv-7612 (2d Cir.), a panel of appeals court judges roundly reversed the prior dismissal. The order stated that, “the Plaintiffs have plausibly alleged that the Defendants made a series of material misstatements about, among other things, Hain’s financial results, its compliance with GAAP, the existence of effective internal controls, its description of its revenue-recognition policies, and its certifications in its SEC filings that, among other things, those filings did not contain any untrue or misleading statements of material fact and rested on adequate internal controls.”
The appeals court also found that the defendants made actionable misleading, "half-true" statements by failing to disclose their reliance on revenue-inflating practices to investors when discussing Hain’s financial success and inventory levels at its distributors.
The opinion concluded that the plaintiffs “have adequately alleged that the Defendants made actionable misstatements and omissions in connection with the [. . .] scheme and acted with scienter" and that "the Plaintiffs have adequately pleaded loss causation, for which there is no heightened pleading standard.”
The case is In re Hain Celestial Group Inc. Securities Litigation, No. 16-cv-4581 (E.D.N.Y.). Labaton Keller Sucharow represents co-lead plaintiff Rosewood Funeral Home.
On September 29, 2025, the U.S. Court of Appeals for the Second Circuit revived a long-standing case against The Hain Celestial Group Inc. (Hain or the Company) and certain of its officers, reversing a district court’s previous dismissal and allowing the case to proceed into discovery.
Labaton Keller Sucharow serves as co-lead counsel in the case, which alleges that Hain, a manufacturer and seller of organic and natural food and personal care products, violated federal securities laws by concealing deteriorating demand from investors through a scheme designed to load Hain’s customers and distributors with excess product at the end of fiscal quarters. According to the suit, Hain “robbed Peter to pay Paul, cannibalizing future revenues to make present sales look more impressive” by offering valuable concessions to distributors at the end of each fiscal quarter to take more product than they could sell without adequately disclosing the practice or accounting for its financial implications to investors. These concessions included (1) cash incentives as high as $500,000 for a single distributor; (2) product discounts of up to 20%; (3) extended payment terms; (4) spoils coverage, or reimbursements for excess product that spoiled or expired; and (5) an absolute right to return unsold product.
The case further alleges that the Company repeatedly attributed its financial results to consumer demand and downplayed concerns about inventory levels without disclosing their reliance on the scheme.
Ruling in favor the plaintiffs in Gimpel v. Hain Celestial Group, No. 23-cv-7612 (2d Cir.), a panel of appeals court judges roundly reversed the prior dismissal. The order stated that, “the Plaintiffs have plausibly alleged that the Defendants made a series of material misstatements about, among other things, Hain’s financial results, its compliance with GAAP, the existence of effective internal controls, its description of its revenue-recognition policies, and its certifications in its SEC filings that, among other things, those filings did not contain any untrue or misleading statements of material fact and rested on adequate internal controls.”
The appeals court also found that the defendants made actionable misleading, "half-true" statements by failing to disclose their reliance on revenue-inflating practices to investors when discussing Hain’s financial success and inventory levels at its distributors.
The opinion concluded that the plaintiffs “have adequately alleged that the Defendants made actionable misstatements and omissions in connection with the [. . .] scheme and acted with scienter" and that "the Plaintiffs have adequately pleaded loss causation, for which there is no heightened pleading standard.”
The case is In re Hain Celestial Group Inc. Securities Litigation, No. 16-cv-4581 (E.D.N.Y.). Labaton Keller Sucharow represents co-lead plaintiff Rosewood Funeral Home.
On September 29, 2025, the U.S. Court of Appeals for the Second Circuit revived a long-standing case against The Hain Celestial Group Inc. (Hain or the Company) and certain of its officers, reversing a district court’s previous dismissal and allowing the case to proceed into discovery.
Labaton Keller Sucharow serves as co-lead counsel in the case, which alleges that Hain, a manufacturer and seller of organic and natural food and personal care products, violated federal securities laws by concealing deteriorating demand from investors through a scheme designed to load Hain’s customers and distributors with excess product at the end of fiscal quarters. According to the suit, Hain “robbed Peter to pay Paul, cannibalizing future revenues to make present sales look more impressive” by offering valuable concessions to distributors at the end of each fiscal quarter to take more product than they could sell without adequately disclosing the practice or accounting for its financial implications to investors. These concessions included (1) cash incentives as high as $500,000 for a single distributor; (2) product discounts of up to 20%; (3) extended payment terms; (4) spoils coverage, or reimbursements for excess product that spoiled or expired; and (5) an absolute right to return unsold product.
The case further alleges that the Company repeatedly attributed its financial results to consumer demand and downplayed concerns about inventory levels without disclosing their reliance on the scheme.
Ruling in favor the plaintiffs in Gimpel v. Hain Celestial Group, No. 23-cv-7612 (2d Cir.), a panel of appeals court judges roundly reversed the prior dismissal. The order stated that, “the Plaintiffs have plausibly alleged that the Defendants made a series of material misstatements about, among other things, Hain’s financial results, its compliance with GAAP, the existence of effective internal controls, its description of its revenue-recognition policies, and its certifications in its SEC filings that, among other things, those filings did not contain any untrue or misleading statements of material fact and rested on adequate internal controls.”
The appeals court also found that the defendants made actionable misleading, "half-true" statements by failing to disclose their reliance on revenue-inflating practices to investors when discussing Hain’s financial success and inventory levels at its distributors.
The opinion concluded that the plaintiffs “have adequately alleged that the Defendants made actionable misstatements and omissions in connection with the [. . .] scheme and acted with scienter" and that "the Plaintiffs have adequately pleaded loss causation, for which there is no heightened pleading standard.”
The case is In re Hain Celestial Group Inc. Securities Litigation, No. 16-cv-4581 (E.D.N.Y.). Labaton Keller Sucharow represents co-lead plaintiff Rosewood Funeral Home.
