I've been following the saga of Mannatech, Inc. (NASDAQ: MTEX) for awhile, mainly because it's too good of a train wreck to pass up: a highly questionable business model, allegations of false and misleading claims about its nutritional products, and corporate governance issues that make Countrywide Financial Corporation (NYSE: CFC) look like Berkshire Hathaway (NYSE: BRK.A). It all started when Texas' attorney general sued the company alleging false and misleading marketing practices. Then chairman Sam Caster resigned from his post as CEO to devote more time to the company, and the company dismissed its auditor over its refusal to strip Caster of his chairmanship.
Oh, and the company has been dealing with shareholder class action lawsuits throughout this matter, alleging that the company used false and misleading tactics to boost its sales and share price. The company announced on Friday that it has settled the lawsuit, agreeing to make "certain corporate governance changes" and pay $850,000 in legal fees to the plaintiffs' attorneys.
So like most shareholder lawsuits, this one ended up being a big fat nothing, and it removes one of the company's many, many problems. The most pressing one still remains: a product of questionable merit distributed through a system that many critics believe is little more than a pyramid scheme. Oh, and the company is losing money, even with that business model. The press release is notable, however, for this awe-inspiring sentence which I believe actually contains the rare triple-negative: "However, such settlements are not uncommonly approved without material modification and, barring any unusual developments, the Company expects that this approval process will be completed within a four to six month period." (emphasis mine)
Mannatech settles shareholder lawsuits
Posted Jun 16th 2008 5:56PM by Zac Bissonnette
Filed under: Law, Scandals
Serious Money: Cheapest Stocks List Shrinks from 26 to 21
Chasing Value: Hasbro Earnings Makes My Point
MEMC CEO Forgoes Bonus; Money Will Go to Retrain Workers
Reader Comments (Page 1 of 1)
6-28-2008 @ 6:51AM
Rick said...
Hey Zac,
I challenge you to a public debate over the issue of the network marketing business model - anytime - anyplace.
I find that most who "trash" network marketing don't have a clue what it is. And by the way network marketing is perfectly legal; pyramid schemes are illegal.
Rick
6-18-2008 @ 12:55AM
1oldscott said...
Deer Zac,
Gosh darn, I’m so proud to read your highly informed blog. I just can not wait to find out what other highly informed reports you will disgorge on us knuckleheads. Law suits, allegations, and pyramid schemes; oh my. How did we ever get by before you came to save us from our bumbling through our lives?
My, my; I feel so much better knowing I can trust those American chemical, I mean drug companies to give us cures for all our ailments. Shucks, I just knew all the nutrition I needed to stay healthy and well came from McDonalds. Them American drug companies don’t have no (that’s a double-negative for ya!) law suits agin’em for nut’en; they be as pure as the driven snow.
Never mind I watched a personal friend go from needing a heart transplant to running three miles a day in less than two years plus my experiences with the Mannatech products. Is it hard not to want to tell people suffering from God knows what that there might be a better way that trusting in chemicals; you bet! Do people get excited when they feel better than that have for years taking drugs; you bet! In their effort to help others do say things they legally can not say (drink this water, it will cure your thirst, sounds stupid to say that water curing thirst is illegal but it is; you can not make medical claims on natural products); I am sure they do.
You see we knuckleheads out here in fly over country understand when something works you are obliged to help others who are in need. Unfortunately, the chemical companies have paid really big bucks to have the law (Texas' attorney general) on their side and let’s face it; if you’re well, you don’t need them.
Do I think this comment will change your mind, not really! After all you’re just a tool of the chemical companies and you don’t even know it, what a knucklehead.
7-23-2008 @ 8:12PM
glycoeducator said...
Dear Zac
Have you studied any thing about glycomic?
Just wondering what you feed your body?