Brazil Securities Commission rejects settlement proposals by IGB Eletrônica board members and executives in financial reporting and disclosure case

The Brazil Securities Commission (CVM) has rejected both a joint and an individual proposal to enter into a settlement agreement (Termo de Compromisso) in an administrative sanctioning proceeding involving IGB Eletrônica S.A. board members and executives. The joint proposal was submitted by board members Celina Miranda Staub, Elizabeth Margareth Staub Priester and Eugênio Emílio Staub and by Moris Arditti as Vice President, while the individual proposal was submitted by Ricardo Émile Staub as Investor Relations Officer. The Federal Specialized Prosecutor’s Office at CVM found a legal impediment to the joint settlement due to non-compliance with Article 11, paragraph 5, item II of Law 6,385, while finding no legal impediment to the individual settlement. The CVM’s Settlement Committee nonetheless concluded that accepting either proposal would not be appropriate, citing the alleged seriousness of the conduct and that the proposed amounts were well below what it considered sufficient to deter similar practices. The underlying allegations include failure to take the necessary steps to convene the annual general meeting for the 2022 financial year, late preparation of 2022 annual financial statements and related regulatory forms, late quarterly filings for the third quarter of 2022 and the first quarter of 2023, late submission of certain monthly statements and the administrator’s report (August 2022 to January 2023), and untimely and incomplete market disclosure regarding the receipt, allocation and effects of tax credit proceeds on 23 January 2023.