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CVM sent 260 notices of evidence of crime to the MP, until September

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This post was translated by Regulatory.News for informational purposes only; the content below is not an official translation from the regulator. See the content in its original language here.

Data are in the most recent version of the sanctioning activity report of the Municipality

The Securities and Exchange Commission (CVM) today discloses the Sanctioning Activity Report with data for the 3rd quarter of 2020 (and accumulated for the first nine months of the year). One of the highlights concerns the number of communications that the Municipality made to the State and Federal Public Ministries regarding of financial crimes between January and September / 2020: 260.

From July to September, there were 40 communications involving information related to evidence of crime identified to the State Public Ministries and 34 to the Federal Public Ministry. Among the most frequent evidence of financial crimes in 2020, the financial pyramids stood out, present in 139 of the 260 communications. In the 3rd quarter, in addition to the pyramids (in 36 of the 74 notices), cases of unauthorized intermediation (in 17 of the 74) and offers of unregistered securities (in 12 of the 74 notices) also stood out.

The CVM has a duty to report to the Public Prosecutor’s Office evidence of “public action criminal offenses” detected in the processes in which it investigates irregularities in the market or identified in other inspection and supervision activities.

Historical series indicates growth

In 2019, the CVM sent 184 letters to public prosecutors. In 2018, there were 130. In previous years, 121 (2017), 93 (2016) and 76 (2015).

Check out more highlights

Stop Order and Warning Offices

In the 3rd quarter of 2020, the CVM issued 8 Stop Orders. Through this action, the Municipality prohibits, as a precautionary measure, under penalty of a daily fine, the practice of irregular acts, such as those related to the inadequate disclosure of information to the public, mainly in relation to public offers or to professional performance without authorization.

CVM’s technical areas also carried out 106 issues of alert letters. It is an educational and guiding tool that communicates about observed irregularities and, if applicable, determines a deadline for correcting the problem without opening a sanctioning procedure.

Investigative or sanctioning procedures

26 investigative administrative procedures were initiated, being an administrative inquiry, 23 terms of accusation of ordinary rite and two of simplified rite *. In the same period, the technical areas concluded 23 administrative processes (Investigations or Accusation Terms) that resulted in some type of accusation. Such proceedings have passed the status of Administrative Sanctioning Proceedings (PAS) and will be judged by the CVM Collegiate Body or terminated by means of a Term of Commitment.

Terms of Commitment

Between July and September / 2020, the Collegiate appreciated proposals for Terms of Commitment (TCs) for 15 processes, involving 52 bidders. Of these proposals analyzed at the Collegiate Meetings, TCs related to 4 processes were approved, involving 9 proponents. Of these four agreements approved by the CVM Board, three were previously subject to negotiations carried out by the House’s Commitment Term Committee (CTC). In such cases, the proponents and CTC submit counter-proposals to close the proceedings.

Judgments

The CVM Collegiate held 14 judgments in ordinary and 2 simplified cases, from July to September this year. In these judgments, among other conclusions, 25 defendants were fined, 4 disabled, 2 warned and 12 acquitted.

The total amount applied to defendants penalized by means of a fine was R $ 8.12 million in the 3rd quarter.

At the end of the period, the stock of cases to be judged by the Collegiate (having a defined reporting director) remained at the same level as at the end of 2019 – 132 administrative sanctioning processes (PAS) – despite the restrictions imposed by the pandemic, reflecting the agility and adaptability shown by the Municipality.

Video conference testimonials

The Sanctioning Activity Report also highlights a significant change in CVM’s performance in the 3rd quarter. The Board regulated the procedures for conducting video conference testimonials within the scope of the sanctioning performance of the Municipality, considering the intensification of the importance of digital work activities, in the current context of technological evolution. The measure went into effect on August 3.

More information

Check out short version and the whole of the Report.


* Understand the differences:

  • Term of charge of ordinary rite: as a result of the investigation, the technical area considers that it has conclusive elements as to the authorship and materiality of the possible irregularity.
  • Simplified rite charge statement: term of charge that deals with infractions under examination of a lower level of complexity and require less probative delay.
  • Administrative inquiry: deals with the most complex cases and which require greater probative delay, when evidence of irregularities is found, even without sufficient elements of authorship and materiality.

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Regulator Information

Abbreviation: CVM
Jurisdiction: Brazil

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