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Mannatech just announced that the Securities and Exchanged commission has ruled that the direct sales company will not face civil action relating to a complaint filed against it as a result of dismissing its accountant last year.

The SEC announced in September of this year that it was launching an informal inquiry into the dismissal of Grant Thornton, the company’s public accountant. The SEC was looking into whether or not the dismissal of the accountants violated various federal laws. Apparently the firing came after Thornton demanded that Mannatech either remove its chairman and founder Sam Caster or find a new accountant. Mannatech chose the later, and promptly fired Thornton and hired a new accountant. While Mannatech did release a formal statement regarding the firing, they neglected to file the proper 8K within the required time frame.

In early September Mannatech was sent a Wells notice, which was merely an indication that they would look further into the company. The Wells notice gave the company a chance to defend itself to prevent further action.

Upon extensive review of the situation, Mannatech has been cleared of any wrongdoing and will not face any formal sanctions from the SEC.

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Mannatech (NASDAQ: MTEX) is facing more legal problems. This time from the enforcement division of the Securities and Exchange Commission. Mannatech, the Texas based supplement maker, is no stranger to lawsuits. The company is still dealing with a complaint filed by the Texas Attorney General over claims the company has made about the health benefits of its supplements.

This time around, it’s the SEC is threatening to take action regarding the suspicious firing last October of Mannatech’s accounting firm, Grant Thornton LLP. The threat, in the form of a Wells notice, was sent to the company on Friday, with copies being sent to both the CFO and chairman of its audit committee. The firing came after Thornton demanded that Mannatech either remove chairman and founder Sam Caster from all responsibilities, or find a new accountant. Mannatech decided to fire Grant Thornton and then hired a new firm, BDO Siedman LLP, the next day.

While Mannatech did release a statement to the SEC regarding the firing, they apparently did not file the appropriate 8K that is required within a 5 day period, and now the SEC wants some questions answered.

The Wells notice is merely an indication that the SEC’s enforcement division plans to seek a cease and desist proceeding against Mannatech. The Wells notice gives the company a chance to defend itself in an effort to prevent any further action.

I’m guessing that Mannatech will fully cooperate with the SEC. The complaint filed by the Texas Attorney General last year, is still pending in court, and Mannatech CEO Wayne Badovinus has openly admitted that the earlier complaint has taken a significant financial toll on the company. I suspect we will see a resolution within the next week- we will keep you posted.

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