Brazil Securities Commission rejects settlement proposal in enforcement case involving Compostela Capital and five individuals

The Brazil Securities Commission (CVM) Board rejected a proposed term of commitment settlement in an administrative sanctioning proceeding involving Compostela Capital Gestão de Recursos Ltda. (formerly Aurora Capital Gestora de Recursos Ltda. and Horus Investimentos – Gestora de Recursos Ltda.) and five individuals, including the firm’s portfolio administration director. The decision followed a finding by the Federal Prosecutor’s Office at the CVM of a legal impediment to entering into the agreement and a recommendation by the Term of Commitment Committee to refuse the proposal. In recommending rejection, the committee cited the alleged seriousness of the conduct, the gap between the proposed amounts and those accepted by the CVM in similar cases, limited expected procedural efficiency gains, the classification of the alleged conduct under Groups IV and V of Annex A to CVM Resolution 45, and the prior history of some of the proposers. The proceeding, opened by the Strategic Risks Supervision Office, investigates alleged irregularities by Compostela Capital as manager of the Horus Brasil Mix multi-strategy private equity fund and the Horus Vetor fund of multimarket fund quotas, and whether the individuals contributed to an allegedly fraudulent transaction in the securities market, with potential breaches referenced under CVM Instructions 08, 558 and 555.