OT: Group days Hebalife products have too much lead

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Group says Herbalife products have too much lead

By ne Geller

NEW YORK (Reuters) - 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 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 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.

California law requires businesses to warn consumers if their

products contain chemicals known to cause cancer or reproductive

toxicity.

The six products mentioned in the letter are the ShapeWorks Protein

Drink Mix, Healthy Meal Nutritional Shake Mix, Tang Kuei Plus herbal

tablets, Thermojetics Nature's Raw Guarana instant tea mix,

ShapeWorks Cell Activator and Multivitamin Complex.

The company says products are sold in 65 countries by a network of

over 1.8 million distributors.

Herbalife shares closed down 4.2 percent at $40.17 on Monday on the

New York Stock Exchange.

Grell said in an interview Monday that individual tablets may not

exceed California's 0.5 microgram limit on lead in dietary

supplements, but he said the daily recommended dosage would result

in lead exposure large enough to warrant a warning label.

A document purported to be an invoice from Analytical Laboratories

in Anaheim Inc, based in Brea, California, for $5,820 for testing

the six products was posted on Fraud Discovery's Web site.

Analytical Laboratories did not reply to calls and an e-mail to

discuss any tests.

Minkow previously uncovered a discrepancy in the biography of

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.

" For more than 28 years, tens of millions of Herbalife consumers

worldwide have been safely using Herbalife products with an

extremely low incidence of serious adverse event reports citing

liver function abnormalities, " the company said at the time.