dietary supplement
A dietary supplement is a manufactured product intended to supplement one's diet by taking a pill, capsule, tablet, powder, or liquid. A supplement can provide nutrients either extracted from food sources or that are synthetic in order ...
s and personal care products. It was founded in November 1993 by
Samuel Caster
Samuel Caster is an American businessman who founded Mannatech, a multi-level marketing firm located in Coppell, Texas. Prior to founding Mannatech, Caster had founded and run Eagle Shield and marketed Electracat, a pest control device declared by ...
, and is headquartered in Flower Mound, Texas. The company's stock is traded on the
NASDAQ
The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
exchange under the symbol MTEX. As of 2017, Mannatech employed 252 people and sold its products through some 220,000 independent sales associates.
In 2007, Mannatech and its salespeople made false claims of anti-disease benefits about its lead product called "Ambrotose" which contains sugars derived from plants. The company was profitable soon after its founding until about 2008, when it started losing money due to exposure of its business practices through a class action lawsuit based on the false health claims, a critical ''
20/20
Visual acuity (VA) commonly refers to the clarity of vision, but technically rates an examinee's ability to recognize small details with precision. Visual acuity is dependent on optical and neural factors, i.e. (1) the sharpness of the retinal ...
Samuel Caster
Samuel Caster is an American businessman who founded Mannatech, a multi-level marketing firm located in Coppell, Texas. Prior to founding Mannatech, Caster had founded and run Eagle Shield and marketed Electracat, a pest control device declared by ...
in 1993, as Congress prepared to pass the
Dietary Supplement Health and Education Act
The Dietary Supplement Health and Education Act of 1994 ("DSHEA"), is a 1994 statute of United States Federal legislation which defines and regulates dietary supplements. Under the act, supplements are regulated by the FDA for Good Manufacturing ...
of 1994, which made feasible the profitable marketing of a wider spectrum of dietary supplements. The company has had a Christian orientation since its founding; the name was intended to evoke manna, and it recruited people to sell its products through its multi-level marketing structure in church congregations. Prior to founding Mannatech, Caster had founded and run Eagle Shield, an insulation manufacturer, and Electracat, a pest control device; both were categorized as a hoax by the Texas Attorney General's office.
Mannatech was founded to sell
dietary supplements
A dietary supplement is a manufactured product intended to supplement one's diet by taking a pill (pharmacy), pill, capsule (pharmacy), capsule, tablet (pharmacy), tablet, powder, or liquid. A supplement can provide nutrients either extr ...
and
personal care products
Personal care or toiletries are consumer products used in personal hygiene, personal grooming or for beautification.
Products
Personal care includes products as diverse as cleansing pads, colognes, cotton swabs, cotton pads, deodorant, eye liner ...
. Before developing its own products, the company sold Manapol, an aloe vera extract made by another company. Its most widely known product has been Ambrotose, a dietary supplement made from sugars derived from plants.
From 1993 to 2009, Rafael Cruz, father of presidential candidate Ted Cruz, was a top salesman for Mannatech.
Mannatech had its initial public offering (IPO) on February 16, 1999, at $8 a share. The stock price settled a few weeks later at a price of $15.13 a share and a market capitalization of $366 million. The IPO raised $12 million in funds to be used for expansion into Australia and the U.K.
False claims and lawsuits
The company came to be known for unproven claims that its products could be used to treat many diseases and conditions, including cancer, diabetes,
autism
The autism spectrum, often referred to as just autism or in the context of a professional diagnosis autism spectrum disorder (ASD) or autism spectrum condition (ASC), is a neurodevelopmental condition (or conditions) characterized by difficulti ...
and
AIDS
Human immunodeficiency virus infection and acquired immunodeficiency syndrome (HIV/AIDS) is a spectrum of conditions caused by infection with the human immunodeficiency virus (HIV), a retrovirus. Following initial infection an individual m ...
. There is no evidence that any of these claims were or are true.
In May 2005 an article was published in '' Barron's'' questioning the company's business practices. In September 2005, a class-action lawsuit was filed against Mannatech for alleged violations of the Securities Exchange Act; it was prompted by the Barron's article.
In 2006, Mannatech distributor Vivienne Balonwu, a U.K. general practitioner, was found by the U.K.
General Medical Council
The General Medical Council (GMC) is a public body that maintains the official register of medical practitioners within the United Kingdom. Its chief responsibility is to "protect, promote and maintain the health and safety of the public" by c ...
panel to have "abused her power as a doctor" after it was determined that she had illegally promoted and sold the company's products to people as a treatment for medical conditions such as chronic obstructive pulmonary disease and
stroke
A stroke is a medical condition in which poor blood flow to the brain causes cell death. There are two main types of stroke: ischemic, due to lack of blood flow, and hemorrhagic, due to bleeding. Both cause parts of the brain to stop functionin ...
-related complications. Following patient complaints about her marketing of the products in 2006, Balonwu was dismissed by her employer, Harmoni, a medical services company, and the GMC panel imposed a 15-month penalty period during which she was "to avoid private or short term locum work" and "to complete a supervised personal development plan to tackle shortcomings in her practice".
Also in 2006, Mannatech was named #5 on '' Forbes''’ list of America's 200 Best Small Companies. At the same time, the company came under investigation by the Texas Attorney General in October 2006 for alleged violations of that state's Deceptive Trade Practices Act. In July 2006, Texas Attorney General Greg Abbott formally charged Mannatech, MannaRelief, Sam Caster, and Reginald McDaniel, the company's medical director, with operating an illegal marketing scheme in violation of state law.
A ''20/20'' undercover investigation that aired June 1, 2007 on
ABC Television ABC Television most commonly refers to:
*ABC Television Network of the American Broadcasting Company, United States, or
*ABC Television (Australian TV network), a division of the Australian Broadcasting Corporation, Australia
ABC Television or ABC ...
showed Mannatech's sales associates teaching sales recruits how to target Mannatech products to people with specific illnesses in a manner that purportedly does not violate
U.S. federal law
The law of the United States comprises many levels of codified and uncodified forms of law, of which the most important is the nation's Constitution, which prescribes the foundation of the federal government of the United States, as well as va ...
, including U.S. Food and Drug Administration regulations, by avoiding direct claims that the products cure any particular diseases.
In August 2007, Caster resigned as CEO of Mannatech. In October 2007, it was reported that the company had fired Grant Thornton LLP as its auditor after the accounting firm demanded that Mannatech remove Caster from all responsibilities to be replaced by Wayne Badovinus as the new chief executive. Several corporate initiatives were undertaken, but after 17 months on the job Badovinus resigned in December 2009. Another member of the board resigned shortly after. Mannatech's Chief Science Officer Robert Sinnott and Mannatech's chief financial officer Steve Fenstermacher were named Co-CEOs. Fenstermacher later resigned.
Publicity over the company's lawsuits began to damage the balance sheets and stock performance. After profits of $32 million in 2006 and $6.6 million in 2007, Mannatech reported a $12.6 million loss in 2008 and a $17.3 million loss in 2009.
Mannatech settled the civil complaint with the State of Texas in February 2009; Mannatech did not admit wrongdoing but agreed to pay $4 million in restitution to clients who purchased products and $2 million to the state to cover its costs in the case. In addition, Sam Caster agreed to pay a $1 million civil penalty and steer clear of any type of leadership position or employment relationship with Mannatech for five years.
In March 2008, Mannatech settled the class-action lawsuit by agreeing to pay $11.25 million to the plaintiff class. As part of the settlement, Mannatech admitted no wrongdoing.
2010 losses were $10.6 million. As the company's market capitalizations continued to fall, S&P Indices dropped it from the S&P 600 Index, stating "They are no longer representative of the small cap market space." Recruiting efforts continued dropping in 2011, widening company losses to $20.6 million. For 2012, the company's net loss narrowed to around $1 million from the about $21 million loss the year before. In 2013, it had around $3 million in net income, and in 2014, it reported profits of $6.5 million and total revenue of $190.1 million.
In November 2017, Mannatech received an
FDA warning letter An FDA warning letter is an official message from the United States Food and Drug Administration (FDA) to a manufacturer or other organization that has violated some rule in a federally regulated activity.
The FDA defines an FDA warning letter as: ...
for illegally marketing several of its supplement products as medicinal agents and for selling adulterated and misbranded products in violation of Title 21 of the Code of Federal Regulations and Good Manufacturing Practice regulations for dietary supplements. In December 2017, Mannatech reached an agreement with the Town Council of
Flower Mound
Flower Mound is an incorporated town located in Denton and Tarrant counties in the U.S. state of Texas. Located northwest of Dallas and northeast of Fort Worth adjacent to Grapevine Lake, the town derives its name from a prominent mound locat ...
, Texas, to relocate its headquarters to an existing facility in the city.
Ben Carson
Starting in 2004, neurosurgeon and conservative politician Ben Carson made videos and spoke at company events promoting Mannatech and its products. In 2004, in a speech at a Mannatech event, he credited the company's products with the disappearance of his cancer symptoms.
Carson's image still appeared on the Mannatech's website in 2014, and in the same year he praised their "glyconutrient" supplements in a PBS special (''The Missing Link – The Science of Brain Health''), sponsored by a group of Mannatech distributors, that was subsequently featured on the site. During the CNBC GOP debate on October 28, 2015, Carson was asked about his relationship with Mannatech and denied any involvement with the company.
Politifact
PolitiFact.com is an American nonprofit project operated by the Poynter Institute in St. Petersburg, Florida, with offices there and in Washington, D.C. It began in 2007 as a project of the ''Tampa Bay Times'' (then the ''St. Petersburg Times'' ...
rated Carson's denial of any involvement as "false". In November 2015, Mannatech said on its website that, for compliance with Federal campaign finance regulations, the company had removed all references to Carson before he announced his bid for the presidency.