Group says Herbalife products have too much lead

Still think that supplements are healthy?

"Six dietary supplements sold by Herbalife Ltd contain dangerous amounts of lead if taken in the recommended dosages, according to information posted on Monday on a Web site linked to a long-time critic of the firm.

Herbalife disputed the claim, saying its weight-loss and nutritional products met regulatory requirements in all of its markets.

'The FDA hasn't established a general limit on lead in foods, but we are certainly well within their suggested guidelines,' Herbalife spokesman George Fischer said in a telephone interview, referring to the U.S. Food and Drug Administration, which sets dietary guidelines.

The Fraud Discovery Institute posted a letter on its Web site on Monday attributed to Christopher Grell, an attorney in Oakland, California, who specializes in product liability cases.

The letter said recommended daily doses of six Herbalife products contained levels of lead that are dangerous and in excess of what California law allows under its Safe Drinking and Toxic Environment Act. It urged the state to order Herbalife to place 'clear and reasonable warnings' on those products.

Barry Minkow, founder of the institute, has $50,000 invested in Herbalife 'put' options, betting that the company's shares will fall.

Minkow, a San Diego pastor who served more than seven years in jail for stock fraud, now works to uncover fraud through the institute. He has a history of criticizing Los Angeles-based Herbalife.

Minkow said in a telephone interview that his bet that the company's shares will fall was only intended to finance his investigation"

Maybe the pastor is still a crook, maybe not.

We will have to wait and see.

But consider this:

"Minkow previously uncovered a discrepancy in the biography of Gregory Probert, who was then Herbalife's president and chief operating officer, that led to Probert's resignation in April.

Probert had said he had earned an MBA degree at California State University. The company said he had been enrolled at the university during the 1980's but never obtained a degree.

Herbalife's market value, after Monday's stock decline, was $2.61 billion. It had sales of $2.15 billion in 2007.

Last month, Herbalife said that Spain had issued an alert cautioning on the consumption of Herbalife products due to suspicious cases of liver damage. Herbalife said it was in discussions with the ministry."

Stay tuned.