Petróleo Brasileiro S.A. (NYSE: PBR), or– Petrobras for the rest of us, is proving that there are risks investing in Brazil that are above and beyond, whether or not the nation keeps electing socialist leaders. The Brazilian oil giant had delayed its formal earnings report — and now that report is being suspended.

Petrobras confirmed on Thursday night that the nation’s state-run oil giant will not file its third-quarter 2014 financial statements accompanied by a review report of its independent auditors, PricewaterhouseCoopers, with the equivalent of its securities commission in Brazil within the period required by regulators.

24/7 Wall St. has been critical of Petrobras for years now. The reason is that this company is not allowed to operate in the same manner as traditional companies. It is a state-run entity, and its common shareholders and ADS holders have a structure that puts them even lower down the line than traditional companies. Petrobras has prices dictated to it that it must pay to get the oil out of the ground and for which it gets to sell the oil. And its governance is effectively dominated by the government and by a large ownership stake by its unions that come before shareholders, and there is a large preferred stake to deal with as well that is uncommon versus other Western oil giants.

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As a result of the developments, Petrobras now said that it expects to release its third-quarter 2014 financial statements on December 12, 2014. That will come without a review by its independent auditors.

Petrobras said:

As has become known publicly, Petrobras is undergoing a unique moment in its history, in light of the accusations and investigations of the “Lava Jato Operation” being conducted by the Brazilian Federal Police, which has led to charges of money laundering and organized crime against the company’s former Downstream Director, Paulo Roberto Costa. The former director is currently under investigation for corruption and embezzlement, among other offenses.

Petrobras claimed in its investor communication that it has taken numerous steps aimed at furthering related investigations:

On October 24 and 25, 2014 Petrobras hired two independent law firms specialized in conducting investigations — Brazilian firm Trench, Rossi e Watanabe Advogados and U.S. firm Gibson, Dunn & Crutcher LLP — to examine the nature, extent and impact of the acts that may have been committed within the context of the allegations made by former Downstream Director Paulo Roberto Costa, as well as to investigate related facts and circumstances that have a significant impact on the company’s business operations. Hiring these independent firms was recommended by the Audit Committee of the Board of Directors in compliance with the best international practices and authorized by the Executive Board.

The delay is further caused by the time needed to gain greater understanding from the ongoing investigations and to respond to the accusations and investigations. The company also will evaluate the need for internal controls improvements.

Friday is going to be a bad day for Petrobras holders. New York ADSs were indicated down almost 6% at $9.60, versus a prior 52-week trading range of $10.09 to $20.94. That is not just a 52-week low here. Petrobras shares are nearing a low not seen in almost 10 years! Do we dare mention that Petrobras ADSs were reading at $60 and $70 as recently as 2008?

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