Mannatech, the dietary supplement company that has been embroiled in legal battles over the last year or so, has settled several lawsuits. The suits were brought to the company by shareholders who accused the Coppell, Texas company of making false claims and using fraudulent sales practices to increase the value of the stock.
As part of the agreement, the company will not have to admit to any wrongdoing, but will make “certain corporate governance changes” including prohibiting their distributors from using third party materials that make claims that Mannatech products treat specific diseases.
Keith Clark, the company’s attorney also said that Mannatech will create a directors committee to oversee all compliance issues as well as keep track of product claims made by the company on its website.
Mannatech will also be required to pay $850,000 dollars in attorney fees to cover the plaintiff’s costs.
Mannatech holds firm to their belief that they did nothing illegal, but chose to settle rather than drag out the case only to incur further costs. The settlement terms are subject to approval by the court, but attorneys for the plaintiffs say that the concessions made by the company meet the requests made by the shareholders.
Its been a rough month for several of the direct sales companies as far as product credibility and safety. Mannatech was smart to settle rather than have their name dragged through the mud. Hopefully the company will make the appropriate changes and can move on.
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[...] to the company in August, blames ongoing litigation for the company’s problems. Mannatech was recently sued by the Texas Attorney General for exaggerating claims made by the company about the effectiveness of [...]
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