NEW YORK (TheStreet) -- Shares of Petrobras  (PBR) - Get Report ticked down in morning trading Tuesday after investors expanded their lawsuit against the Brazilian state-owned energy company, which has been dealing with an alleged corruption scandal for months.

The investors claim that PricewaterhouseCoopers, the auditor of Petrobras, turned a "blind eye" to the alleged fraud at the company and "ignored obvious red flags."

The amended complaint filed Friday in a federal court in Manhattan claims that Petrobras and its senior executives violated terms of both U.S. and Brazilian corporate law, in addition to Brazil's securities laws, civil code, and Securities Commission regulations.

Petrobras has been at the center of an alleged corruption and bribery scandal for the past several months. Executives at the company allegedly participated in a multi-billion-dollar money-laundering and bribery operation and hid those actions from investors.

Insight from TheStreet's Research Team

Tim Melvin commented on Petrobras in a recent post on RealMoney.com. Here is what Melvin had to say about the stock:

Before moving away from the Bain & Co. private equity report I want to share a few more investable observations I came away with after reading it this past weekend. Each year I have read the report I find it incredibly useful as a guide to opportunities in certain sectors and regions of the world, and this year is no different.

This year's report highlights Brazil and some of the opportunities that may be available in that troubled nation. I have held some Brazilian stocks for a couple of years now and it has been a bumpy, unpleasant journey so far. Over my holding period, we have gone from "this looks like maximum pessimism" to "maybe they will vote her out and jumpstart things" to "you have got to be kidding me." We have seen widespread corruption involving Petrobras, continued weakness in the economy and, just this weekend, protestors taking to the streets to demand the impeachment of the president the country just reelected. Brazil is a mess and it's not getting better anytime soon.

The Bain report underscores that there is lot of dry powder looking for a home in Brazil. There is cash of $4.7 billion in private equity funds that are Brazil-specific and another $6.5 billion in Latin America funds that is earmarked for Brazilian investments. That is a lot of cash chasing a limited set of opportunities in a troubled economy. Brazil is expected to have low or nonexistent growth rates again this year and the real will most likely continue to decline against major world currencies.

- Tim Melvin, 'Prospecting in 2 Troubled Economies' originally published 3/18/2015 on RealMoney.com

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Separately, TheStreet Ratings team rates PETROLEO BRASILEIRO SA- PETR as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate PETROLEO BRASILEIRO SA- PETR (PBR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and poor profit margins."

You can view the full analysis from the report here: PBR Ratings Report