NEW YORK (TheStreet) -- Shares of Valeant Pharmaceuticals (VRX)  were rebounding on Tuesday morning after the stock tumbled about 12% yesterday following a report that former CEO Michael Pearson and ex-CFO Howard Schiller are the subject of a U.S. criminal probe.

"if you want to sell Valeant, Valeant was down very badly yesterday, do not sell it off the U.S. attorney," TheStreet's Jim Cramer said on CNBC's "Squawk on the Street" this morning.

"You sell it off the $30 billion in debt...You sell it off the fact that every single drug stock has had a line of weakness over major drugs...You sell it because of the cash flow," Cramer contended.

Cramer also mentioned that in his experience when a U.S. attorney investigates either a sitting CEO or a former CEO, it has "not really mattered."

"So don't use that as the reason to sell. Use the fundamentals," Cramer added.

"I'm not saying go buy Valeant, it's down a lot because of the U.S. attorney, and it shouldn't be," Cramer noted.

Late yesterday, Valeant said it previously disclosed in October 2015 that the U.S. Attorney's Office for the Southern District of New York had began an investigation involving the company.

The Canadian pharmaceutical company said it is cooperating with the probe and it does not comment or speculate about ongoing investigations.

Separately, TheStreet Ratings Team as a Sell with a ratings score of D on the stock.

The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: VRX

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