The Brazil Securities Commission (CVM) has rejected proposed settlement agreements (termos de compromisso) intended to close two administrative sanctioning proceedings, following adverse recommendations from its Commitments Committee. In the T4F Entertainment case (PAS CVM 19957.003158/2024-46), CVM declined a joint proposal from six board members. While CVM’s Federal Specialized Prosecutor’s Office found no legal impediment, the committee considered acceptance neither convenient nor timely, citing the alleged seriousness of the conduct, its classification under Group V of Annex A to CVM Resolution 45, and the case’s specific context involving alleged labour conditions analogous to slavery among outsourced workers at the 2023 Lollapalooza festival and alleged breaches of directors’ fiduciary duties, including diligence and oversight failures. In the ETB FIP case (PAS CVM 19957.003570/2020-32), CVM rejected a joint proposal from Banco J. Safra S.A. (as fund manager during 28 February 2014 to 30 January 2015), its then responsible director, Turmalina Gestão e Administração de Recursos S.A. (as fund administrator in the same period) and its then responsible director. Here, the prosecutor’s office identified a legal impediment to the agreement, and the committee also cited the sanctions unit’s view, parts of the proponents’ history, the proposed amounts being far below what would be minimally adequate, limited procedural economy (only four of ten defendants offered a settlement), and the alleged gravity of the facts, including alleged BRL 5.2 million in improper payments, fund issuances completed less than four months after prior issuances, alleged failures to disclose material facts relating to litigation, and permitting a pension fund to exceed a 25% investment limit in the fund.

Original source View in tracker