New York — September 12, 2005 — The law firm of Milberg Weiss Bershad & Schulman LLP announces that a class action lawsuit was filed on September 9, 2005, on behalf of all persons who purchased or otherwise acquired the securities of Mannatech, Inc. (NasdaqNM: MTEX) between August 10, 2004 and May 9, 2005 (the “Class Period”). A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss’s website at: http://www.milbergweiss.com
If you purchased or otherwise acquired the securities of Mannatech between August 10, 2004 and May 9, 2005, inclusive, and sustained damages, you may, no later than October 31, 2005, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Milberg Weiss Bershad & Schulman LLP, or other counsel of your choice, to serve as your counsel in this action.
The action is pending in the United States District Court for the District of New Mexico against the Company, its Chief Executive Officer, Samuel L. Caster, its Chief Financial Officer, Stephen D. Fenstermacher, and its Chief Operating Officer, Terry L. Persinger.
According to the complaint, defendants violated sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by issuing a series of material misrepresentations to the market during the Class Period. The Complaint alleges that defendants failed to disclose that: (1) the Company’s internal controls were grossly inadequate, resulting in inadequate control of the Company’s sales associates; and (2) defendants caused or permitted unfounded and false claims to be disseminated to the public concerning the efficacy of Mannatech’s products.
Mannatech develops nutritional supplements, skin-care, and weight management products. During the Class Period, defendants repeatedly assured investors that the Company was on track to meet its financial goals and touted the success of its “network-marketing” program as an effective method to increase sales. Defendants also made glowing statements about Mannatech’s products, touting the products as miracle cures for weight loss and serious illnesses, such as a pill that could “work wonders” on cancer. As a result, Mannatech stock reached over $26 a share during the Class Period.
On May 9, 2005, Barron’s published an article exposing improper practices prevalent at Mannatech. The article questioned the legitimacy of the Company’s business practices, and noted that despite the Company’s “surface flash, eye-popping financials and grand plans, Mannatech’s allure steadily dims the more intensely one scrutinizes its provenance and how it makes its living.” Specifically, the article pointed to a complaint filed in Los Angeles Superior Court that charged the Company with negligent misrepresentations and conspiracy to commit fraud, as well as a host of complaints from the Texas Attorney General’s office questioning the background of Mannatech’s CEO, Samuel Caster. The article also questioned the validity of the Company’s therapeutic claims for certain nutritional supplements and cited millions of dollars worth of suspiciously timed sales by Company insiders. In response to the facts contained in the article that questioned the legitimacy of the Company’s statements and business practices, the stock fell to $12.11 on May 10, 2005, having lost more than 50% of its value during the Class Period.
Milberg Weiss Bershad & Schulman LLP (http://www.milbergweiss.com) is a firm with over 100 lawyers with offices in New York City, Los Angeles, Boca Raton, Delaware, and Washington D.C. and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others for nearly 40 years. Please contact the Milberg Weiss website for more information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys:
Steven G. Schulman
One Pennsylvania Plaza, 49th fl.
New York, NY 10119-0165
Phone number: (800) 320-5081
5200 Town Center Circle, Suite 600
Boca Raton, Florida 33486