The Nucleus for Financial and Capital Market StudieCenter for Financial and Capital Markets Studiess (MFCap) at Fundação Getulio Vargas’ Sao Paulo Law School has completed the third edition of a study called “Beyond CVM’s NumbersThe Regulator’s Data: Enforcement oin the Brazilian Capital Markets.” It provides an in-depth analysis of how the Brazilian Securities and Exchange Commission (CVM) judges potentially illegal practices in the Brazilian capital markets.
According to the study, after CVM judged a record of 109 processes in 2018, the number fell to 98 in 2019, 63 in 2020 and 56 in 2021.
On the other hand, the number of cases that could potentially lead to penalties increased 36.7% in 2021, compared to the previous year, to 346.
The study was jointly coordinated by Viviane Müller Prado, a professor at the FGV Sao Paulo Law School, and Marcos Galileu Lorena Dutra. Researchers Ezequiel Fajreldines dos Santos, Ana Paula Ribeiro Nani, Isabella Cruz Borelli Paiva Barros, Marianna B. Diaz M. de Oliveira, Ramon Moussa Abdul Aziz Kanj and Tiffany Felício contributed to it. According to the study, some factors identified in 2020 continued to slow down the judgment of processes.
“CVM’s board continued to operate incompletely, as some seats were not filled in 2021. This came on top of other challenges that have existed for several years, such as budget restrictions,” Prado explains.
The study also notes that the new penalty regime established by Law 13,506 of November 13, 2017 has not yet caused enforcement to become stricter, especially if measured by the processes judged in 2021.
Prado adds that in 2021, the total value of fines imposed reached the lowest level since 2016, even though Law 13,506 of 2017 increased the potential limit from R$50,000 to R$500 million.
According to MFCap’s study, 282 potentially unlawful cases were settled through agreements, compared to 178 in 2020 and 274 in 2019.
The sums to be paid through these agreements went from R$66.2 million in 2019 to R$43.5 million in 2020 and R$69 million in 2021.
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