Brazil Securities Commission rejects settlement proposal from XP Investimentos and executives in Rico-related probe

The Brazil Securities Commission (CVM) has rejected a proposed Termo de Compromisso settlement submitted by XP Investimentos Corretora de Câmbios Títulos e Valores Mobiliários S.A. (as owner of the Rico brand) and two statutory directors in an administrative inquiry opened ahead of a potential sanctioning proceeding. The Federal Prosecutor’s Office at the CVM (PFE-CVM) identified a legal impediment to concluding the agreement, and the Term of Commitment Committee (CTC) found acceptance not appropriate given the legal obstacle, the alleged seriousness of the conduct, and the preliminary stage of the investigation, which the Market and Intermediaries Superintendence (SMI) indicated may require further diligences. The underlying inquiry concerns alleged failures to present clients’ securities lending orders, contractual automation of securities lending, and alleged lack of diligence and loyalty toward clients by prioritising the firm’s interests over clients’ interests, potentially breaching Articles 12 and 31 of CVM Resolution 35. With the settlement rejected, the inquiry remains ongoing and continues in the preliminary phase that may lead to the opening of an administrative sanctioning proceeding.