Markets closed this evening. Shortly thereafter a story broke that Herbalife director Pedro Cardosa is wanted by Brasilian authorities for participating an a fraud in Espirito Santo (Holy Spirit). Details of the news article can be found here.
Herbalife (NYSE:HLF) investors can also find details on the story published in Portuguese here and here.
Google Translate can help provide the requisite modification into English.
This article is a quick hit but asks you to consider 3 important questions.
1) How will Herbalife respond to news that one of their Board Members is being pursued for a fraud charge?
2) If Mr. Cardoso resigns, who will take his place?
3) Is this the last of the skeletons in the closet for Herbalife Board members or is this issue a canary in the coalmine for what is to come?
Media outlets are destined to dig deeper on this story overnight. In the interim, Herbalife's credibility as a legitimate enterprise has taken yet another hit tonight. No doubt, the SEC will be asking who knew what and when did they know it?
Stay tuned.
