Mannatech Institutes Policy Against Improper Health Claims

[buck09]

To summerize:

1. Mannatech is going to try and stop their associaites from doing the one and only thing that nets them sales - insane health claims.

2. They're going to send C&D letters. (No mention of actual enforcement though...)

and

3. It's going to be done in house.

Mannatech, Incorporated (NASDAQ: MTEX), a leading developer and provider of dietary supplements and skin care solutions, today announced a number of compliance initiatives related to sales and marketing activities utilized by the Company's independent sales associates. "On behalf of Mannatech's Board of Directors and executive management team, we are announcing that significant steps have been taken to address a wide range of issues which have been under review," said Stan Fredrick, lead director of the Company's Board of Directors. "Our management team will continue reviewing Company policies and procedures for ongoing improvements and industry best practices." The following list outlines these initiatives:

1. Associates should immediately cease the use of all materials in any form, including educational materials, that link the benefits of glyconutrients in association with any particular disease, disease process, or disease claim in conjunction with the sale of Mannatech products.
2. Third party vendor literature is no longer permitted to be sold or distributed at Mannatech corporate or associate sponsored events.
3. The use of testimonials that link the benefits of Mannatech products in association with any particular disease, disease process, or disease claim will not be permitted in conjunction with the sale of Mannatech products.
4. Additional resources for Web site compliance -- Mannatech has contracted with a third-party service provider for additional support in screening potential non-compliant Web sites, issuing automated cease and desist letters, and following up with additional reviews of offending Web sites. Mannatech is expanding its internal compliance department with the addition of five full-time employees who will provide in-house services supporting these initiatives.

"These initiatives are the result of an ongoing review of the Company's compliance policies and reinforce the Company's tone at the top," said Gerald Gilbert, chairman of the Compliance Committee of the Board of Directors.

[wserra]

Translation from MLM doublespeak:

For years now, our reps have been making ever more extravagant claims for what these glorified, hyper-expensive vitamins do. We know. It would be impossible not to know. Hell, we even encourage it. We give 'em hints as to how to do it: Talk about "glyconutrients" instead of "Ambrotose" (nudge, nudge, wink, wink); set up web sites that appear to be independent but are actually just duplicates; arrange "conferences" at which shill^H^H^H^H^H buyers testify with the fervor of new converts how our stuff cured their cancer|diabetes|htn|brain aneurysm|broken leg. Finally, if called on it, act shocked, shocked, wring our hands, lament that we have no control over these miscreants, and point to the "policy" that prohibits these acts (which we have enforced with all the efficacy of noise regulations at a bikers' rally).

Well, that seems not to be working as well as it used to. So now it's time to trot out Plan B. What's that, you ask? Well, all the stuff we said we were doing to keep our reps from emulating 19th Century snake-oil salesmen - now we're really gonna do it. Really. Truly. At least unless it affects the bottom line of recruiting new marks.

Trust us.