Hercules Founder Quits as CEO, Hangs On to Board Seat Amid College Bribery Charges
Manuel Henriquez has relinquished his roles as chief executive and chairman, but Hercules wants to keep him on its board — for now.
Hercules Capital founder Manuel Henriquez remains on the board after stepping down as chairman and chief executive officer amid charges he participated in a college bribery scheme.
The firm’s chief investment officer, Scott Bluestein, will immediately serve as interim CEO while lead independent director Robert Badavas is now interim chairman, according to a statement Wednesday from Hercules. Henriquez will remain on the board and serve as an adviser to the debt investment firm.
Keeping the founder on the firm’s board — at least for now — will provide “some consistency” in the transition of leadership at Hercules, according to spokesman Michael Hara. The arrangement allows the firm to have access to the founder when it might need him, he said.
Hara said Wednesday in a phone interview that the firm is seeking feedback from its portfolio companies, investors, and its own lenders, Wells Fargo & Co. and Union Bank, before deciding whether Henriquez will keep his board seat over the long term. Hercules has 92 companies in its portfolio, according to Hara.
“We want to reach out to everyone,” he said. “We’re going to have to deal with this day-to-day as we work it through with our customers and banking partners.”
The U.S. Department of Justice has charged Henriquez and dozens of others with conspiracy to commit mail fraud and honest services mail fraud after a sweeping investigation of a bribery scheme involving college admissions and testing. Henriquez didn’t respond to an email and phone calls seeking comment on the charges.
Henriquez and his wife Elizabeth participated in a “college entrance exam cheating scheme” for their two daughters on four separate occasions, according to an affidavit supporting the government’s criminal complaint. For example, in 2015 they allegedly made a $25,000 payment for a proctor to sit with their older daughter during her SAT exam and provide her with the correct answers.
In an effort to get their older daughter into Georgetown University, they also conspired to bribe the school’s head tennis coach, Gordon Ernst, to designate her as a tennis recruit, according to the affidavit providing sworn statement from Federal Bureau of Investigations special agent Laura Smith.
Hara declined to comment on the charges against Henriquez because they are personal.
Hercules, based in Palo, Alto, California, provides loans to companies backed by venture-capital firms. Interim CEO Bluestein, who joined Hercules in 2010, leads the firm’s origination team and was previously its credit officer.
Shares of Hercules were up less than 1 percent at $12.28 each in mid-afternoon trading on Wednesday. They had dropped 9 percent yesterday on news of the college bribery scheme.