The CVM (Securities Commission, which regulates the Brazilian stock market) decided to file a lawsuit against two former executives of the reinsurer IRB Brasil Re for disclosure of false information and market manipulation, informs Folha.
In early 2020, José Carlos Cardoso and Fernando Passos, then president and chief financial officer of IRB, said in a meeting with analysts that the Berkshire Hathaway investment fund, owned by billionaire Warren Buffett (photo), had bought a relevant stake in the company.
As a result, the shares rose 6.6% the following day – only that Buffett’s fund denied the information saying it never participated or was interested in participating in the company, triggering a wave of distrust in relation to its management.
Cardoso and Passos resigned in the midst of the crisis, and an investigation contracted by the management that replaced them detected irregularities in the payment of approximately R$ 60 million in bonuses to directors and employees in previous years.
According to the CVM, Cardoso failed in his due diligence by disclosing false information to the market. Passos, in turn, is accused of price manipulation in the stock market.