Brazil Securities Commission accepts BRL 1 million settlement with BEM DTVM and its responsible director and rejects More Invest proposal

The Brazil Securities Commission (CVM) Board approved a settlement agreement (Termo de Compromisso) with BEM Distribuidora de Títulos e Valores Mobiliários Ltda., as administrator of the Índico Fundo de Investimento Multimercado Crédito Privado, and with its responsible director, André Bernardino da Cruz Filho, in an administrative sanctioning proceeding. It rejected a new settlement proposal from More Invest Gestora de Recursos, the fund’s manager, and did not consider More Invest’s request for reconsideration. Under the accepted settlement, BEM DTVM and Cruz Filho will pay a total of BRL 1,000,000, split as BRL 750,000 and BRL 250,000. More Invest had proposed to pay BRL 500,000 in three instalments, but the Termo de Compromisso Committee (CTC) recommended rejection citing the alleged seriousness of the conduct and limited procedural economy given five other accused, and the Board only diverged from the CTC on the BEM DTVM and Cruz Filho proposal. The Federal Prosecutor’s Office at the CVM (PFE-CVM) found no legal impediment to the settlement, and the proceeding concerns, among other points, alleged failures to ensure fund liquidity was compatible with redemption terms and to conduct adequate diligence on transaction documentation under CVM Instruction 555, as well as alleged fraudulent operations attributed to More Invest under CVM Resolution 62.