Archive for September 23rd, 2009

Mannatech Company Settle False Marketing Claims

The multi-level marketing world – the same industry that gave forth Amway and other home selling networks – got a black eye this week.

Mannatech Inc., a maker of dietary supplements, agreed to pay $6 million to settle a lawsuit brought by the Texas attorney general. The state alleged that the Coppell, Texas company made false claims about its health benefits and marketed products as cures and treatments for diseases.

Possibly the most unusual aspect of the agreement was that the Sam Caster, the company’s founder, former chairman, former CEO and biggest shareholder, agreed to pay a $1 million civil penalty. The lawsuit, filed in 2007, alleged numerous instances in which freelance sales associates falsely claimed that the products helped cure or prevented diseases such as cancer, autism and Down syndrome. Caster, the suit alleged, failed to effectively stop these tactics.
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