BREAKING NEWS: Department of Justice and Federal Bureau of Investigations (DOJ and FBI) are investigating Herbalife

According to an Federal official, and reported by multiple sources such as Financial Times and Los Angeles Times, FBI and DOJ had opened a criminal investigation into Herbalife several MONTHS ago, before FTC announced their own investigation.

With SEC and FTC also investigating the company, this may be bad news for Herbalife.

See LA Times Link: http://www.latimes.com/business/la-fi-herbalife-fbi-20140412,0,5064592.story

Who Really Decides What Is Safe In your Food (and Nutritional Supplements)?

English: Logo of the . (Photo credit: Wikipedia)

Obvious fact:  nutritional supplements are considered "food" by the Food and Drug Administration (FDA).

Not so obvious fact: what ends up in the nutritional supplements are often UNregulated
by the FDA, because companies can simply declare some ingredient to be "generally regarded as safe" (GRAS) based on some internal studies, and include them without telling the FDA.

Some ingredients are submitted to FDA with full studies and gains full FDA approval, but most ingredients are not approved by the FDA, and are merely declared to be GRAS by internal studies. A third way, where the GRAS study was submitted to FDA for approval, are often withdrawn, and the ingredient used any way.

GRAS was meant to be used for common ingredients like vegetable oil, vinegar, and so on. But the law, enjoying its 56th birthday recently, is now an anachronism and a loophole for companies to punch through ingredients without formal review by the FDA.

National Resource Defense Council has published a paper where it tracked 56 companies involved in 250+ chemicals declared as GRAS, as reported by Consumerist. Some of which are... troubling. And you need to be aware if you are drinking or taking any weight-loss or energy formulas.

Scam Psychology: Don't be a GIMP (Good Inexperienced Money People)

Carl Sagan, famous scientist, who said
"extraordinary claims require extraordinary proof"
 (Photo credit: Wikipedia)

There are many types of people looking for additional income, and vast majority of them are GIMPs i.e. "good inexperienced money people" (my thanks to M_Norway on BehindMLM for introducing the term). There really is no formal definition for a GIMP, but its closest synonym is "money sheeple", i.e. people who are just not savvy with money and scams, and thus, invested in scams and shady businesses with their hard earned money.

GIMPs are typically people who know little about network marketing, internet, and scamworld in general. They don't understand that anybody can make a website in hours, and meeting rooms can be booked and sleek presentations can be done for minimal costs nowadays. Even income claims can be faked or exaggerated. Claims are worthless without a basis for comparison, and to quote the great scientist Carl Sagan, "extraordinary claims require extraordinary proof", most of which is not forthcoming.

Part of the problem stems from our daily use of money, which leads us (through self-serving bias / optimism bias) to believe that we are far more savvy with decisions about money than we really are.