Posts Tagged ‘mannatech’

Multi-Level Marketing Income Disclosures

Medifast Pyramid SchemeSome multi-level marketing (MLM) companies release income disclosures or earnings disclosures. These documents theoretically provide insight into how much distributors earn in commissions or overrides.

However, the disclosures are generally worthless. What is more important than the information in these documents? The information that is not disclosed in the documents.

Multilevel marketing companies purposely omit important information that would allow potential distributors or investors to have real insight into these plans.

MLM Scheme, Mannatech, Pays Millions to Victims for Making False Claims of Cures and Health Benefits

News from Pyramid Scheme Alert:

Mannatech, a long time MLM company, member of the Direct Selling Association and publicly traded on the New York Stock Exchange, has agreed to pay millions of dollars to consumers who were deceived by its false health claims about its products. The state of Texas, where the scheme is based, charged that Mannatech falsely claimed that its food supplements cured Down syndrome, cystic fibrosis, cancer and other serious diseases.

Mannatech Receives Wells Notice From SEC

In July of last year, the Attorney General of Texas filed a lawsuit against  multi-level marketing company Mannatech (NASDAQ:MTEX), alleging the company used illegal sales and marketing practices.

Then in August, the company’s CEO, Sam Caster, stepped down. Although he resigned as CEO, he stayed on as chairman of the board.

In October, Grant Thornton, the company’s auditing firm, was fired. Mannatech issued a press release which stated that Grant Thornton was dismissed because they wanted the company to relieve Sam Caster of all duties, and the board said no. Mannatech said there were no disagreements about accounting principles or audit matters.

Mannatech Fires Auditors Grant Thornton

Mannatech Inc. fired its auditors, Grant Thornton, after refusing to comply with GT’s demand that Sam Caster be removed from all duties. Caster is the founder of Mannatech and the current chairman of the board. He resigned as CEO two months ago after Texas started legal proceedings against the company for making illegal health claims about their products.The Board says it didn’t remove Caster from his duties because it wasn’t “in the best interest of shareholders.” Mannatech’s SEC filing regarding the firing of the auditors said that there were no disagreements about accounting principles, audit scope, or financial disclosures.

The new auditors for Mannatech will be BDO Seidman.

Mannatech CEO Quits to Devote More Time to Mannatech

Okay, I admit it. That headline comes straight from Zac Bissonette at Bloggingstocks. I couldn’t help it though. It’s just so…. so…. right.

In July, the Texas Attorney General filed suit against Mannatech to stop the company from using illegal sales and marketing practices. The suit says that company associates have claimed the products cured, mitigated, treated, and prevented diseases such as cancer and autism. Such claims violate of state and federal laws.

Legal Inaction Against Mannatech?

The Texas Attorney General doesn’t want to talk about why his office hasn’t taken legal action against multi-level marketing company Mannatech. His office was informed on October 5 by the Department of State Health Services that Mannatech is a threat to public health and safety.

Mannatech was recently featured on ABC’s news program 20/20. The program highlighted the bogus health claims made by representatives pushing Mannatech’s “Ambrotose” product, which is nothing more than a sugar pill.

Mannatech Bogus Health Claims?

20/20 did a hidden camera investigation for 3 months, going to Mannatech sales pitches around the country. The meetings start with disclaimers that the products don’t cure anything. Yet the meetings are full of testimonials from people who claim they were cured by Mannatech products. Claims are also made that the product is a bigger breakthrough than even penicillin.

Mannatech products are only sold through a multi-level marketing (MLM) plan.

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