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Mannatech settles shareholder lawsuits |
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| Jun 16, 2008 05:56 PM UTC |
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Tracked Blogger
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Via BloggingStocks:
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)Read | Permalink | Email this | Comments <map name="google_ad_map_145-1226340"><area href="http://imageads.googleadservices.com/pagead/imgclick/145-1226340?pos=0" shape="rect" coords="1,2,367,28" /><area href="http://services.google.com/feedback/abg" shape="rect" coords="384,10,453,23" /></map> 
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