Hercules Capital Inc. (NYSE: HTGC) saw its shares trade down sharply on Tuesday, but it’s not based on earnings or any other traditional metrics that you might have expected. Tuesday’s drop is being tied to news that the company’s chief executive officer was included on a list of parents in an FBI complaint related to the college admissions scandal that has been all over the news on Tuesday.

The sell-off in shares of Hercules Capital was being tied to fresh news that the company’s CEO was included in a list of parents, coaches, actors and athletes in a complaint filed by the FBI related to a college admissions scandal.

Wedbush Securities has been the first to defend the shares that has been seen by 24/7 Wall St. While Wedbush maintained its Outperform rating, the firm lowered its price target to $13.50 from $15.00. That 10% haircut in the price target seems to be based more on uncertainty rather than based on formal damages.

Shares of Hercules Capital were last seen trading down over 9.5% at $12.05 and the 7.6 million shares which had traded hands with just an hour before the close represented more than ten-times its normal full daily trading volume.

Hercules Capital previously had a consensus analyst target price from Refinitiv of $14.70 and its 52-week range is $10.57 to $14.17. The business development company has a $1.16 billion market cap and its dividend yield screens out at more than 9% based on its static $0.31 per shares quarterly dividend that has been the same since at least the end of 2013.

According to Wedbush’s Henry Coffee:

We have no idea how this will play out and to what extent this will or will not impact the company’s long-term growth rate. While we do not want to underestimate the importance of Mr. Henriquez to the company, it is important to point out that the indictment is a personal matter and does not in anyway involve HTGC itself. We are adjusting our price target from $15.00 to $13.50 to adjust for this uncertainty and reiterating our OUTPERFORM rating, With our new price target, the total return (appreciation + current yield) associated with HTGC is north of 20%.

While other scandals around DWIs, substance abuse, commenting about aliens and Sith lords, and lying about history on resumes have all been tied to public company officers in years past, this only shows that new scandals and follies are still alive and well.

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