Herbalife Ltd. (HLF): The Big Lesson You Need to Learn From the KPMG Scandal

The takeaway for investors is:Keep a watchful eye on financial statements, and don’t let the Yahoo! Finance page be the end of your due diligence. Talk to competitors, talk to management, and even visit the sites, if possible. One way my previous employer discovered a fraudulent Chinese firm was by camping outside of the manufacturing plant — where trucks should have been pouring out like freshly mixed concrete. The trouble was, no one was coming in and out. It was a dormant factory, contradicting what the company’s financial statements and press releases said about the facility.

In the world of investing, there is truly only one person firmly in your corner:you. Don’t let that fact become an after-the-matter lesson.

Fool contributor Michael Lewis has no position in any stocks mentioned. The Motley Fool owns shares of Skechers USA Inc (NYSE:SKX) and has the following options:Long Jan 2014 $50 Calls on Herbalife Ltd. (NYSE:HLF).