SEC v. IRB Brasil Resseguros S.A., No. 1:23-cv-03905, Southern District of New York (May 10, 2023) — Complaint

GRE
GORY A. KASPER
[email protected]
ZACHARY T. CARLYLE
[email protected]
SECURITIES AND EXCHANGE COMMISSION
1961 Stout Street, 17th Floor
Denver, Colorado 80294
(303) 844-1000
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION,
P
laintiff,
- against –
IRB BRASIL RESSEGUROS S.A.,
D
efendant.
Civ. __________________
     ECF CASE
COMPLAINT AND JURY
DEMAND
P
laintiff United States Securities and Exchange Commission (the “SEC” or
“Commission”), for its Complaint against defendant IRB Brasil Resseguros S.A. (“IRB” or
“Defendant”), alleges as follows:
SUMMARY
1.This is an SEC enforcement action against IRB, a Brazilian reinsurance company,
based on the actions of its former senior executive Fernando Passos (“Passos”) in connection
with planting a false story with the media and disseminating false documents claiming that
Berkshire Hathaway Inc. (“Berkshire”) had recently made a substantial investment in IRB. In
early February 2020, IRB's stock price fell significantly following a short-seller publicly
releasing a letter questioning IRB's financial results. In late February and early March 2020, in
an effort to boost IRB's stock price, Passos planted the false story that Berkshire had invested in
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3-cv-03905

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IRB and caused IRB to make false and misleading statements directly to investors and at least
one securities analyst.
2. After the media reported the false Berkshire news following the close of trading
on February 26, 2020, IRB's stock price rose by more than 6%. Following Berkshire's public
denial that it had ever invested, or intended to invest, in IRB, the company's stock price dropped
materially over the next two trading sessions.
3. As a result of this misconduct, IRB, through the actions of Passos, violated
Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)]
and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
NATURE OF THE PROCEEDINGS AND REQUESTED RELIEF
4. The Commission brings this action pursuant to the authority conferred on it by
Sections 21(d), 21(e) and 27 of the Exchange Act [15 U.S.C. § 78u(d)-(e) and 78aa]. The
Commission seeks a permanent injunction against IRB, enjoining it from engaging in the
transactions, acts, practices, and courses of business alleged in this Complaint. The Commission
further seeks any other relief the Court may deem appropriate pursuant to Section 21(d)(5) of the
Exchange Act [15 U.S.C. § 78u(d)(5)].
JURISDICTION AND VENUE
5. This Court has jurisdiction over this action pursuant to Sections 21(d)(1),
21(d)(3)(A), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u(e),
and 78aa].
6. Venue lies in this Court pursuant to Sections 21(d) and 27 of the Exchange Act
[15 U.S.C. § 78u(d) and 78aa]. Certain of the acts, practices, transactions, and courses of
business alleged in this Complaint occurred within the Southern District of New York, Passos

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and IRB have transacted business in this District, and IRB investors who were harmed by the
fraud are located in this District.
DEFENDANT
7. IRB Brasil Resseguros S.A. is a Brazilian reinsurance company with
headquarters in Rio de Janeiro, Brazil. IRB's stock trades on the B3 S.A. - Brasil, Bolsa, Balcao
stock exchange (the “B3 Exchange”) located in Sao Paulo, Brazil. At the time of the fraudulent
conduct alleged herein, approximately 25 percent of IRB’s shareholders were investors based in
the United States.
RELATED PARTY
8. Fernando Passos is a resident of Sao Paulo, Brazil. At the time of the fraudulent
conduct alleged in this Complaint, Passos was IRB's executive vice president of finance and
investor relations. In these roles, Passos was IRB's most senior financial officer and was
responsible for IRB's communications with investors.
FACTUAL ALLEGATIONS
9. In early February 2020, a Brazilian asset management firm that was short-selling
IRB stock released a letter questioning the reliability and sustainability of IRB's financial results
(the “Short-Seller Letter”).
10. Among other things, the Short-Seller Letter cited to comments made by Warren
Buffett, the Chairman and chief executive officer (“CEO”) of Berkshire, which is a large
publicly traded U.S.-based holding company, about the reinsurance industry generally. Mr.
Buffett and Berkshire are well-known investors and financial commentators concerning the
insurance and reinsurance industry, and Berkshire owns large insurance businesses.

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11. In the wake of the Short-Seller Letter, the price of IRB's stock declined
significantly.
12. In an attempt to bolster IRB's stock price and reassure investors that IRB was a
sound investment, Passos disseminated a false story to the media about Berkshire making a large
investment in IRB stock. Passos also made false and misleading statements to at least four
investors and at least one securities analyst about Berkshire becoming a substantial investor in
IRB.
I. IRB, Directed by Passos, Spread False Information Through the Media and
Made False and Misleading Statements about Berkshire Investing in IRB.

13. IRB, directed by Passos acting in his capacity as IRB's executive vice president of
finance and investor relations, engaged in several fraudulent and deceptive acts that operated as a
fraud and deceit on investors in connection with the dissemination of the false story concerning
Berkshire's purported investment in IRB. In connection with this deceptive conduct, IRB,
through Passos, also made false and misleading statements to at least four investors and at least
one securities analyst concerning Berkshire's purported investments in IRB.
14. IRB, through Passos, acted knowingly or recklessly in engaging in the fraudulent
and deceptive conduct and making the misstatements set forth below.
A. IRB, Directed by Passos, Fabricated Documents and Spread a False Story
about Berkshire Investing in IRB to the Media.

15. On February 22, 2020, Passos sent text messages to IRB's Communications and
Marketing Manager (the “Communications Manager”) stating that Berkshire was an investor in
IRB and that it had recently sharply increased its position in IRB stock. Passos noted that
Berkshire was cited several times in the Short-Seller Letter and urged the Communications
Manager to work with IRB's public relations firm to leak the purported information about

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Berkshire's investment to a journalist who would be willing to publish it without attribution to
IRB.
16. Passos's claim that Berkshire was an IRB investor was false. Berkshire had not
recently increased its position in IRB stock and, in fact, held zero shares of IRB stock.
17. IRB, through Passos, knew or was reckless in not knowing that the claim that
Berkshire was an investor in IRB was false. For instance, on February 21, 2020, Passos
requested and received an email with an attached schedule of IRB's shareholders as of February
18, 2020, organized from largest to smallest shareholder. The shareholder list showed that
Berkshire was not an IRB investor.
18. To lend credibility to the false story concerning Berkshire's investments in IRB
and increase the likelihood that it would be reported in the press, Passos fabricated a shareholder
list that showed Berkshire had made substantial purchases of IRB stock in February 2020 and
was the fourth largest shareholder of IRB as of February 18, 2020 (the “Fake Shareholder List”).
On February 22, 2020, Passos sent text messages with images of the Fake Shareholder List to the
Communications Manager, noting that a journalist could use the Fake Shareholder List to
confirm the purported news of Berkshire's investment. Passos instructed the Communications
Manager to share it with IRB's public relations firm and ultimately with the press. IRB's
Communications Manager followed Passos's instructions and forwarded the information about
Berkshire's supposed investment in IRB and the Fake Shareholder List to IRB's public relations
firm the same day.
19. On February 23, 2020, Passos emailed the Fake Shareholder List to the Chairman
of the board of directors of one of IRB's largest investors (“Investor A”). The Fake Shareholder
List falsely showed that, as of February 18, 2020, Berkshire owned over 28 million shares of

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IRB stock and was one of its largest shareholders. IRB, through Passos, misrepresented to
Investor A that Berkshire owned over 28 million shares of IRB stock and was one of its largest
shareholders.
20. On February 23, 2020, Passos also continued his efforts to get his false story
concerning Berkshire's purported investment leaked to the press and reported to the public.
Passos sent numerous text messages to the Communications Manager suggesting specific
journalists to contact, through the public relations firm, about publishing the story. Passos also
texted his subordinate, IRB's Director of Investor Relations, stating that they will plant, and
Passos will spread, the story that Berkshire bought 28 million shares of IRB. Passos further
elaborated that he planned to use an old email with a Berkshire executive to help build the story
about Berkshire's supposed recent investment.
21. Passos followed through on his plan to bolster his false story when, later on
February 23, 2020, he sent IRB's Communications Manager an image of an email he fabricated.
The email, dated February 21, 2020, purported to be from IRB's CEO to a Berkshire executive,
thanking Berkshire for its recent investment in IRB (the “Fake Berkshire Email”). The
Communications Manager sent this additional supposed evidence of Berkshire's investment to
IRB's public relations firm the next day.
22. From February 24, 2020, to February 28, 2020, Passos attended meetings with
investors and securities analysts in Europe and the United States to reassure them of IRB's sound
financial results, notwithstanding the recent Short-Seller Letter (the “Roadshow”). During this
time, IRB, through Passos, made false and misleading statements to investors and at least one
securities analyst.

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23. On or about February 24, 2020, while Passos was in London for the Roadshow,
IRB, through Passos, misrepresented to an analyst and at least two investors that Berkshire had
invested in IRB. Specifically:
a. Passos met with a securities analyst who covered IRB (“Analyst A”) and falsely
represented that Berkshire had invested in IRB.
b. Passos represented to a large IRB investor (“Investor B”) that Berkshire had
recently purchased 28 million shares of IRB.
c. Passos met with another large IRB investor (“Investor C”) and represented to the
investor that Berkshire had invested in IRB.
24. While on the Roadshow, Passos also sent dozens of text messages to the
Communications Manager urging that the false information about Berkshire's investment in IRB
be circulated to the press.
25. For instance, on February 26, while in New York, New York, Passos exchanged
dozens of text messages with the Communications Manager in which he continued to tell her to
contact various journalists through IRB's public relations firm and spread the false information
concerning Berkshire's substantial investment in IRB.
26. On or about February 26, IRB's public relations firm, acting at the direction of the
Communications Manager, who was following Passos's instructions, provided information about
Berkshire's purported investment in IRB and sent the Fake Shareholder List to at least one
journalist. On the same day, when the Communications Manager relayed a journalist's request
for the most up-to-date version of the IRB shareholder list, Passos, while in New York, sent the
Communications Manager images of the Fake Shareholder List and the Fake Berkshire Email.

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The Communications Manager then sent these images of the Fake Shareholder List and Fake
Berkshire Email to IRB's public relations firm.
B. The Media Reported the Fake Berkshire Story, IRB's Stock Price Increased,
and Passos and IRB Continued to Spread the False Information.

27. After trading closed on February 26, 2020, and then again on February 27,
Brazilian media reported Berkshire's purported investment in IRB based on the false information
supplied by Passos through IRB's public relations firm.
28. On February 27, U.S. media company Bloomberg issued a report titled “IRB
Climbs Amid Report Buffett's Berkshire Increased Stake,” noting that the increase in IRB's stock
price was “the most intraday on record” after a Brazilian newspaper “reported Warren Buffett's
Berkshire Hathaway increased its stake in the firm amid the stock's recent sell-off.”
29. From the close of trading on February 26 to the close of trading on February 27,
IRB's stock price increased by more than 6%.
30. On February 28, 2020, Passos, while in Boston, Massachusetts for the Roadshow,
met with an institutional investor that held IRB shares (“Investor D”) and implied that Berkshire
had in fact recently invested in IRB.
31. On March 2, 2020, Passos continued to spread the false Berkshire information. On
March 2 during a call with securities analysts, IRB's CEO, relying on information provided by
Passos and with Passos on the call, made statements indicating that Berkshire had invested in
IRB. On the call, Passos did nothing to correct the false statements that Berkshire had invested in
IRB. Later that day, the Brazilian media again reported the false Berkshire information.
C. Berkshire Denied that it Invested in IRB and IRB's Stock Price Plunged.

32. After the market closed on March 3, 2020, Berkshire issued a press release
denying that it had ever invested, or had any intention of investing, in IRB.

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33. IRB's Director of Investor Relations forwarded a copy of Berkshire's public denial
that night to Passos, to which Passos responded with the Portuguese equivalent of: “Damn” and
“We're [expletive]!”
34. From the close of trading on March 3 through the close of trading on March 4,
IRB's stock price dropped materially.
35. After the close of trading on March 4, 2020, IRB announced that Passos and IRB's
CEO had resigned.
36. On March 5, IRB's stock price continued to drop and closed down significantly
lower from the close of trading on March 3, 2020, through the close of trading on March 5.
II. IRB, through Passos, Violated the U.S. Securities Laws by Engaging in
Fraudulent and Deceptive Acts.

37. As detailed above, Passos committed numerous fraudulent and deceptive acts in
connection with spreading false information about the purported Berkshire investment in IRB.
Among other things, Passos, knew or was reckless in not knowing that he:
a. Created the false Berkshire story and caused it to be disseminated to the public
through the media;
b. Fabricated the Fake Shareholder List, emailed it to Investor A, and caused it to be
disseminated to the media through IRB's public relations firm;
c. Fabricated and disseminated the Fake Berkshire Email to IRB's Communications
Manager and public relations firm;
d. Made false and misleading statements to at least four investors (Investors A, B, C,
D) and one securities analyst (Analyst A) concerning Berkshire's purported
investment in IRB.

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e. Disseminated false and misleading information about Berkshire's supposed
investment in IRB to securities analysts through IRB's CEO who repeated the
false Berkshire investment information Passos had provided to him.
38. Passos engaged in the fraudulent and deceptive acts detailed above while he was
IRB's most senior financial officer and the IRB officer responsible for investor communications.
As a result, IRB, through Passos, engaged in a fraud and Passos's knowledge or recklessness may
be imputed to IRB for purposes of IRB’s violations of the U.S. securities laws.
III. IRB, through Passos, Made Material Misstatements and Omissions.

39. As detailed above, Passos made false and misleading statements to at least four
investors (Investors A, B, C, D) and one securities analyst (Analyst A).
40. Passos's statements to the Investors and Analyst concerning Berkshire's
investment in IRB were false and misleading when made and Passos knew or was reckless in not
knowing that his statements about Berkshire's purported investment in IRB were false and
misleading. Berkshire had not invested in IRB and, on February 21, 2020, Passos received a
shareholder list that showed Berkshire was not an IRB shareholder.
41. The false and misleading statements made by IRB through Passos concerning
Berkshire's purported investment in IRB were material. Berkshire and its Chairman and CEO,
Warren Buffet, are well-known investors and Berkshire owns large insurance businesses. When
the false information regarding Berkshire's investment was reported to the public, IRB's stock
price rose approximately 6%. Following Berkshire's denial that it had ever invested, or had any
intention of investing, in IRB, and the resignations of Passos and IRB's CEO, IRB's stock price
decreased materially. A reasonable investor would consider Berkshire's purported investment in
IRB important information when deciding to purchase, hold, or sell IRB stock.

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42. Passos made the false and misleading statements while acting as IRB's most
senior financial officer and the IRB officer responsible for investor communications. As a result,
IRB, through Passos, made the false and misleading statements. Passos knew or was reckless in
not knowing that the statements were false. Passos's knowledge or recklessness may be imputed
to IRB for purposes of IRB’s violations of the U.S. securities laws.
IV. IRB's Conduct, through Passos, was in Connection with the Purchase or Sale
of Securities.

43. At the time IRB, through Passos, engaged in fraudulent and deceptive acts and
made false and misleading statements concerning Berkshire's purported investment in IRB, IRB's
stock was publicly trading on the B3 Exchange. Investors, including certain U.S. investors,
purchased shares of IRB stock while the false Berkshire information was in the public domain
and had not yet been corrected by Berkshire. IRB, through Passos, made false and misleading
statements to investors in IRB stock and at least one securities analyst regarding Berkshire’s
supposed investment, including during meetings about IRB's reported financial results and
business prospects. Accordingly, IRB's fraudulent and deceptive conduct and false and
misleading statements, made through Passos, were in connection with the purchase or sale of
IRB's securities.
44. In connection with the conduct alleged in this Complaint, IRB, through Passos,
directly or indirectly, made use of the means or instrumentalities of interstate commerce, or of
the mails, including sending text messages to facilitate the dissemination of the false Berkshire
news to the media and forwarding the Fake Shareholder List and Fake Berkshire Email, while
Passos was in the United States.
V. IRB, through Passos, Engaged in Conduct in the United States that
Constitutes Significant Steps in Furtherance of its Violations and its Conduct
had a Foreseeable Substantial Effect Within the United States.

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45. The misconduct alleged in this complaint had foreseeable substantial effects on
investors in the United States. These effects were foreseeable to Passos and IRB, through Passos,
because, among other reasons, at or around the time Passos began engaging in the misconduct
that is the subject of this Complaint, Passos received a shareholder list that showed U.S.
shareholders held significant investments in IRB stock. At the time of the fraudulent conduct
alleged in this Complaint, approximately 25 percent of IRB’s shareholders were investors based
in the United States.
46. IRB, through Passos, took significant steps in furtherance of the fraud while in the
United States, including sending text messages with the Fake Shareholder List and Fake
Berkshire Email from New York, New York, and misleading an institutional investor regarding
Berkshire's investment in IRB at a meeting in Boston, Massachusetts. In addition, Passos sent
dozens of text messages from the United States to facilitate the dissemination of the false
Berkshire news to the media.
CLAIM FOR RELIEF
Violation of Exchange Act Section 10(b) and Rule 10b-5 Thereunder

47. The Commission realleges and incorporates by reference paragraphs 1 through 46,
as though fully set forth herein.
48. Through Passos, IRB, directly or indirectly, acting with scienter, by use of the
means or instrumentalities of interstate commerce, or of the mails, or of a facility of a national
securities exchange, in connection with the purchase or sale of a security: employed devices,
schemes or artifices to defraud; made untrue statements of a material fact or omitted to state a
material fact necessary in order to make the statements made, in light of the circumstances under

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which they were made, not misleading; and engaged in acts, practices, or courses of business
which operated or would operate as a fraud or deceit upon another person.
49. By engaging in the conduct described above, IRB violated and, unless restrained
and enjoined, will again violate Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule
10b-5 thereunder [17 C.F.R. § 240.10b-5].
RELIEF SOUGHT
WHEREFORE, the Commission respectfully requests that this Court:
I.
Find that IRB, through Passos, committed the violations alleged in this Complaint;
II.
Enter an Injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil
Procedure, permanently restraining and enjoining IRB from violating, directly or indirectly, the
laws and rules alleged in this Complaint;
III.
Grant such other relief as this Court may deem just or appropriate.

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JURY DEMAND
The Commission demands a trial by jury on all claims so triable.
Dated: May 9, 2023  S/ Gregory A. Kasper_______________
Gregory A. Kasper (NY 2735405; SDNY GK6596)
Regional Trial Counsel
Zachary T. Carlyle (pro hac application
forthcoming)
Senior Trial Counsel
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
1961 Stout Street, 17th Floor
Denver, Colorado 80294
(303) 844-1000
[email protected]
[email protected]

GREGORY A. KASPER 
[email protected] 
ZACHARY T. CARLYLE 
[email protected] 
SECURITIES AND EXCHANGE COMMISSION 
1961 Stout Street, 17th Floor 
Denver, Colorado 80294 
(303) 844-1000

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

UNITED STATES SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

- against –

IRB BRASIL RESSEGUROS S.A., 

Defendant. 

Civ. __________________ 
     ECF CASE 

COMPLAINT AND JURY 
DEMAND 

Plaintiff United States Securities and Exchange Commission (the “SEC” or 

“Commission”), for its Complaint against defendant IRB Brasil Resseguros S.A. (“IRB” or 

“Defendant”), alleges as follows: 

SUMMARY 

1. This is an SEC enforcement action against IRB, a Brazilian reinsurance company,

based on the actions of its former senior executive Fernando Passos (“Passos”) in connection 

with planting a false story with the media and disseminating false documents claiming that 

Berkshire Hathaway Inc. (“Berkshire”) had recently made a substantial investment in IRB. In 

early February 2020, IRB's stock price fell significantly following a short-seller publicly 

releasing a letter questioning IRB's financial results. In late February and early March 2020, in 

an effort to boost IRB's stock price, Passos planted the false story that Berkshire had invested in 

23-cv-03905

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mailto:[email protected]
mailto:[email protected]


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IRB and caused IRB to make false and misleading statements directly to investors and at least 

one securities analyst. 

2. After the media reported the false Berkshire news following the close of trading 

on February 26, 2020, IRB's stock price rose by more than 6%. Following Berkshire's public 

denial that it had ever invested, or intended to invest, in IRB, the company's stock price dropped 

materially over the next two trading sessions. 

3. As a result of this misconduct, IRB, through the actions of Passos, violated 

Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] 

and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

NATURE OF THE PROCEEDINGS AND REQUESTED RELIEF 

4. The Commission brings this action pursuant to the authority conferred on it by 

Sections 21(d), 21(e) and 27 of the Exchange Act [15 U.S.C. § 78u(d)-(e) and 78aa]. The 

Commission seeks a permanent injunction against IRB, enjoining it from engaging in the 

transactions, acts, practices, and courses of business alleged in this Complaint. The Commission 

further seeks any other relief the Court may deem appropriate pursuant to Section 21(d)(5) of the 

Exchange Act [15 U.S.C. § 78u(d)(5)]. 

JURISDICTION AND VENUE 

5. This Court has jurisdiction over this action pursuant to Sections 21(d)(1), 

21(d)(3)(A), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u(e), 

and 78aa]. 

6. Venue lies in this Court pursuant to Sections 21(d) and 27 of the Exchange Act 

[15 U.S.C. § 78u(d) and 78aa]. Certain of the acts, practices, transactions, and courses of 

business alleged in this Complaint occurred within the Southern District of New York, Passos 

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and IRB have transacted business in this District, and IRB investors who were harmed by the 

fraud are located in this District. 

DEFENDANT 

7. IRB Brasil Resseguros S.A. is a Brazilian reinsurance company with 

headquarters in Rio de Janeiro, Brazil. IRB's stock trades on the B3 S.A. - Brasil, Bolsa, Balcao 

stock exchange (the “B3 Exchange”) located in Sao Paulo, Brazil. At the time of the fraudulent 

conduct alleged herein, approximately 25 percent of IRB’s shareholders were investors based in 

the United States. 

RELATED PARTY 

8. Fernando Passos is a resident of Sao Paulo, Brazil. At the time of the fraudulent 

conduct alleged in this Complaint, Passos was IRB's executive vice president of finance and 

investor relations. In these roles, Passos was IRB's most senior financial officer and was 

responsible for IRB's communications with investors. 

FACTUAL ALLEGATIONS 

9. In early February 2020, a Brazilian asset management firm that was short-selling 

IRB stock released a letter questioning the reliability and sustainability of IRB's financial results 

(the “Short-Seller Letter”). 

10. Among other things, the Short-Seller Letter cited to comments made by Warren 

Buffett, the Chairman and chief executive officer (“CEO”) of Berkshire, which is a large 

publicly traded U.S.-based holding company, about the reinsurance industry generally. Mr. 

Buffett and Berkshire are well-known investors and financial commentators concerning the 

insurance and reinsurance industry, and Berkshire owns large insurance businesses. 

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11. In the wake of the Short-Seller Letter, the price of IRB's stock declined 

significantly. 

12. In an attempt to bolster IRB's stock price and reassure investors that IRB was a 

sound investment, Passos disseminated a false story to the media about Berkshire making a large 

investment in IRB stock. Passos also made false and misleading statements to at least four 

investors and at least one securities analyst about Berkshire becoming a substantial investor in 

IRB. 

I. IRB, Directed by Passos, Spread False Information Through the Media and 
Made False and Misleading Statements about Berkshire Investing in IRB. 

 
13. IRB, directed by Passos acting in his capacity as IRB's executive vice president of 

finance and investor relations, engaged in several fraudulent and deceptive acts that operated as a 

fraud and deceit on investors in connection with the dissemination of the false story concerning 

Berkshire's purported investment in IRB. In connection with this deceptive conduct, IRB, 

through Passos, also made false and misleading statements to at least four investors and at least 

one securities analyst concerning Berkshire's purported investments in IRB. 

14. IRB, through Passos, acted knowingly or recklessly in engaging in the fraudulent 

and deceptive conduct and making the misstatements set forth below. 

A. IRB, Directed by Passos, Fabricated Documents and Spread a False Story 
about Berkshire Investing in IRB to the Media. 

 
15. On February 22, 2020, Passos sent text messages to IRB's Communications and 

Marketing Manager (the “Communications Manager”) stating that Berkshire was an investor in 

IRB and that it had recently sharply increased its position in IRB stock. Passos noted that 

Berkshire was cited several times in the Short-Seller Letter and urged the Communications 

Manager to work with IRB's public relations firm to leak the purported information about 

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Berkshire's investment to a journalist who would be willing to publish it without attribution to 

IRB. 

16. Passos's claim that Berkshire was an IRB investor was false. Berkshire had not 

recently increased its position in IRB stock and, in fact, held zero shares of IRB stock. 

17. IRB, through Passos, knew or was reckless in not knowing that the claim that 

Berkshire was an investor in IRB was false. For instance, on February 21, 2020, Passos 

requested and received an email with an attached schedule of IRB's shareholders as of February 

18, 2020, organized from largest to smallest shareholder. The shareholder list showed that 

Berkshire was not an IRB investor. 

18. To lend credibility to the false story concerning Berkshire's investments in IRB 

and increase the likelihood that it would be reported in the press, Passos fabricated a shareholder 

list that showed Berkshire had made substantial purchases of IRB stock in February 2020 and 

was the fourth largest shareholder of IRB as of February 18, 2020 (the “Fake Shareholder List”). 

On February 22, 2020, Passos sent text messages with images of the Fake Shareholder List to the 

Communications Manager, noting that a journalist could use the Fake Shareholder List to 

confirm the purported news of Berkshire's investment. Passos instructed the Communications 

Manager to share it with IRB's public relations firm and ultimately with the press. IRB's 

Communications Manager followed Passos's instructions and forwarded the information about 

Berkshire's supposed investment in IRB and the Fake Shareholder List to IRB's public relations 

firm the same day. 

19. On February 23, 2020, Passos emailed the Fake Shareholder List to the Chairman 

of the board of directors of one of IRB's largest investors (“Investor A”). The Fake Shareholder 

List falsely showed that, as of February 18, 2020, Berkshire owned over 28 million shares of 

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IRB stock and was one of its largest shareholders. IRB, through Passos, misrepresented to 

Investor A that Berkshire owned over 28 million shares of IRB stock and was one of its largest 

shareholders. 

20. On February 23, 2020, Passos also continued his efforts to get his false story 

concerning Berkshire's purported investment leaked to the press and reported to the public. 

Passos sent numerous text messages to the Communications Manager suggesting specific 

journalists to contact, through the public relations firm, about publishing the story. Passos also 

texted his subordinate, IRB's Director of Investor Relations, stating that they will plant, and 

Passos will spread, the story that Berkshire bought 28 million shares of IRB. Passos further 

elaborated that he planned to use an old email with a Berkshire executive to help build the story 

about Berkshire's supposed recent investment. 

21. Passos followed through on his plan to bolster his false story when, later on 

February 23, 2020, he sent IRB's Communications Manager an image of an email he fabricated. 

The email, dated February 21, 2020, purported to be from IRB's CEO to a Berkshire executive, 

thanking Berkshire for its recent investment in IRB (the “Fake Berkshire Email”). The 

Communications Manager sent this additional supposed evidence of Berkshire's investment to 

IRB's public relations firm the next day. 

22. From February 24, 2020, to February 28, 2020, Passos attended meetings with 

investors and securities analysts in Europe and the United States to reassure them of IRB's sound 

financial results, notwithstanding the recent Short-Seller Letter (the “Roadshow”). During this 

time, IRB, through Passos, made false and misleading statements to investors and at least one 

securities analyst. 

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23. On or about February 24, 2020, while Passos was in London for the Roadshow, 

IRB, through Passos, misrepresented to an analyst and at least two investors that Berkshire had 

invested in IRB. Specifically: 

a. Passos met with a securities analyst who covered IRB (“Analyst A”) and falsely 

represented that Berkshire had invested in IRB. 

b. Passos represented to a large IRB investor (“Investor B”) that Berkshire had 

recently purchased 28 million shares of IRB. 

c. Passos met with another large IRB investor (“Investor C”) and represented to the 

investor that Berkshire had invested in IRB. 

24. While on the Roadshow, Passos also sent dozens of text messages to the 

Communications Manager urging that the false information about Berkshire's investment in IRB 

be circulated to the press. 

25. For instance, on February 26, while in New York, New York, Passos exchanged 

dozens of text messages with the Communications Manager in which he continued to tell her to 

contact various journalists through IRB's public relations firm and spread the false information 

concerning Berkshire's substantial investment in IRB. 

26. On or about February 26, IRB's public relations firm, acting at the direction of the 

Communications Manager, who was following Passos's instructions, provided information about 

Berkshire's purported investment in IRB and sent the Fake Shareholder List to at least one 

journalist. On the same day, when the Communications Manager relayed a journalist's request 

for the most up-to-date version of the IRB shareholder list, Passos, while in New York, sent the 

Communications Manager images of the Fake Shareholder List and the Fake Berkshire Email.  

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The Communications Manager then sent these images of the Fake Shareholder List and Fake 

Berkshire Email to IRB's public relations firm. 

B. The Media Reported the Fake Berkshire Story, IRB's Stock Price Increased, 
and Passos and IRB Continued to Spread the False Information. 

 
27. After trading closed on February 26, 2020, and then again on February 27, 

Brazilian media reported Berkshire's purported investment in IRB based on the false information 

supplied by Passos through IRB's public relations firm. 

28. On February 27, U.S. media company Bloomberg issued a report titled “IRB 

Climbs Amid Report Buffett's Berkshire Increased Stake,” noting that the increase in IRB's stock 

price was “the most intraday on record” after a Brazilian newspaper “reported Warren Buffett's 

Berkshire Hathaway increased its stake in the firm amid the stock's recent sell-off.” 

29. From the close of trading on February 26 to the close of trading on February 27, 

IRB's stock price increased by more than 6%. 

30. On February 28, 2020, Passos, while in Boston, Massachusetts for the Roadshow, 

met with an institutional investor that held IRB shares (“Investor D”) and implied that Berkshire 

had in fact recently invested in IRB. 

31. On March 2, 2020, Passos continued to spread the false Berkshire information. On 

March 2 during a call with securities analysts, IRB's CEO, relying on information provided by 

Passos and with Passos on the call, made statements indicating that Berkshire had invested in 

IRB. On the call, Passos did nothing to correct the false statements that Berkshire had invested in 

IRB. Later that day, the Brazilian media again reported the false Berkshire information. 

C. Berkshire Denied that it Invested in IRB and IRB's Stock Price Plunged. 
 

32. After the market closed on March 3, 2020, Berkshire issued a press release 

denying that it had ever invested, or had any intention of investing, in IRB. 

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33. IRB's Director of Investor Relations forwarded a copy of Berkshire's public denial 

that night to Passos, to which Passos responded with the Portuguese equivalent of: “Damn” and 

“We're [expletive]!” 

34. From the close of trading on March 3 through the close of trading on March 4, 

IRB's stock price dropped materially. 

35. After the close of trading on March 4, 2020, IRB announced that Passos and IRB's 

CEO had resigned. 

36. On March 5, IRB's stock price continued to drop and closed down significantly 

lower from the close of trading on March 3, 2020, through the close of trading on March 5. 

II. IRB, through Passos, Violated the U.S. Securities Laws by Engaging in 
Fraudulent and Deceptive Acts. 

 
37. As detailed above, Passos committed numerous fraudulent and deceptive acts in 

connection with spreading false information about the purported Berkshire investment in IRB. 

Among other things, Passos, knew or was reckless in not knowing that he: 

a. Created the false Berkshire story and caused it to be disseminated to the public 

through the media; 

b. Fabricated the Fake Shareholder List, emailed it to Investor A, and caused it to be 

disseminated to the media through IRB's public relations firm; 

c. Fabricated and disseminated the Fake Berkshire Email to IRB's Communications 

Manager and public relations firm; 

d. Made false and misleading statements to at least four investors (Investors A, B, C, 

D) and one securities analyst (Analyst A) concerning Berkshire's purported 

investment in IRB. 

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e. Disseminated false and misleading information about Berkshire's supposed 

investment in IRB to securities analysts through IRB's CEO who repeated the 

false Berkshire investment information Passos had provided to him. 

38. Passos engaged in the fraudulent and deceptive acts detailed above while he was 

IRB's most senior financial officer and the IRB officer responsible for investor communications. 

As a result, IRB, through Passos, engaged in a fraud and Passos's knowledge or recklessness may 

be imputed to IRB for purposes of IRB’s violations of the U.S. securities laws. 

III. IRB, through Passos, Made Material Misstatements and Omissions. 
 

39. As detailed above, Passos made false and misleading statements to at least four 

investors (Investors A, B, C, D) and one securities analyst (Analyst A). 

40. Passos's statements to the Investors and Analyst concerning Berkshire's 

investment in IRB were false and misleading when made and Passos knew or was reckless in not 

knowing that his statements about Berkshire's purported investment in IRB were false and 

misleading. Berkshire had not invested in IRB and, on February 21, 2020, Passos received a 

shareholder list that showed Berkshire was not an IRB shareholder. 

41. The false and misleading statements made by IRB through Passos concerning 

Berkshire's purported investment in IRB were material. Berkshire and its Chairman and CEO, 

Warren Buffet, are well-known investors and Berkshire owns large insurance businesses. When 

the false information regarding Berkshire's investment was reported to the public, IRB's stock 

price rose approximately 6%. Following Berkshire's denial that it had ever invested, or had any 

intention of investing, in IRB, and the resignations of Passos and IRB's CEO, IRB's stock price 

decreased materially. A reasonable investor would consider Berkshire's purported investment in 

IRB important information when deciding to purchase, hold, or sell IRB stock. 

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42. Passos made the false and misleading statements while acting as IRB's most 

senior financial officer and the IRB officer responsible for investor communications. As a result, 

IRB, through Passos, made the false and misleading statements. Passos knew or was reckless in 

not knowing that the statements were false. Passos's knowledge or recklessness may be imputed 

to IRB for purposes of IRB’s violations of the U.S. securities laws. 

IV. IRB's Conduct, through Passos, was in Connection with the Purchase or Sale 
of Securities. 

 
43. At the time IRB, through Passos, engaged in fraudulent and deceptive acts and 

made false and misleading statements concerning Berkshire's purported investment in IRB, IRB's 

stock was publicly trading on the B3 Exchange. Investors, including certain U.S. investors, 

purchased shares of IRB stock while the false Berkshire information was in the public domain 

and had not yet been corrected by Berkshire. IRB, through Passos, made false and misleading 

statements to investors in IRB stock and at least one securities analyst regarding Berkshire’s 

supposed investment, including during meetings about IRB's reported financial results and 

business prospects. Accordingly, IRB's fraudulent and deceptive conduct and false and 

misleading statements, made through Passos, were in connection with the purchase or sale of 

IRB's securities. 

44. In connection with the conduct alleged in this Complaint, IRB, through Passos, 

directly or indirectly, made use of the means or instrumentalities of interstate commerce, or of 

the mails, including sending text messages to facilitate the dissemination of the false Berkshire 

news to the media and forwarding the Fake Shareholder List and Fake Berkshire Email, while 

Passos was in the United States. 

V. IRB, through Passos, Engaged in Conduct in the United States that 
Constitutes Significant Steps in Furtherance of its Violations and its Conduct 
had a Foreseeable Substantial Effect Within the United States. 

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45. The misconduct alleged in this complaint had foreseeable substantial effects on 

investors in the United States. These effects were foreseeable to Passos and IRB, through Passos, 

because, among other reasons, at or around the time Passos began engaging in the misconduct 

that is the subject of this Complaint, Passos received a shareholder list that showed U.S. 

shareholders held significant investments in IRB stock. At the time of the fraudulent conduct 

alleged in this Complaint, approximately 25 percent of IRB’s shareholders were investors based 

in the United States. 

46. IRB, through Passos, took significant steps in furtherance of the fraud while in the 

United States, including sending text messages with the Fake Shareholder List and Fake 

Berkshire Email from New York, New York, and misleading an institutional investor regarding 

Berkshire's investment in IRB at a meeting in Boston, Massachusetts. In addition, Passos sent 

dozens of text messages from the United States to facilitate the dissemination of the false 

Berkshire news to the media. 

CLAIM FOR RELIEF 
Violation of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 

 
47. The Commission realleges and incorporates by reference paragraphs 1 through 46, 

as though fully set forth herein. 

48. Through Passos, IRB, directly or indirectly, acting with scienter, by use of the 

means or instrumentalities of interstate commerce, or of the mails, or of a facility of a national 

securities exchange, in connection with the purchase or sale of a security: employed devices, 

schemes or artifices to defraud; made untrue statements of a material fact or omitted to state a 

material fact necessary in order to make the statements made, in light of the circumstances under 

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which they were made, not misleading; and engaged in acts, practices, or courses of business 

which operated or would operate as a fraud or deceit upon another person. 

49. By engaging in the conduct described above, IRB violated and, unless restrained 

and enjoined, will again violate Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 

10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

RELIEF SOUGHT 

WHEREFORE, the Commission respectfully requests that this Court: 

I. 

Find that IRB, through Passos, committed the violations alleged in this Complaint; 

II. 

Enter an Injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil 

Procedure, permanently restraining and enjoining IRB from violating, directly or indirectly, the 

laws and rules alleged in this Complaint; 

III. 

Grant such other relief as this Court may deem just or appropriate.

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JURY DEMAND 

The Commission demands a trial by jury on all claims so triable. 

Dated: May 9, 2023  S/ Gregory A. Kasper_______________                                

Gregory A. Kasper (NY 2735405; SDNY GK6596) 
Regional Trial Counsel 
Zachary T. Carlyle (pro hac application 
forthcoming) 
Senior Trial Counsel 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
1961 Stout Street, 17th Floor 
Denver, Colorado 80294 
(303) 844-1000 
[email protected] 
[email protected] 

 

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	SUMMARY
	NATURE OF THE PROCEEDINGS AND REQUESTED RELIEF
	JURISDICTION AND VENUE
	DEFENDANT
	RELATED PARTY
	FACTUAL ALLEGATIONS
	RELIEF SOUGHT
	I.
	II.
	III.
	JURY DEMAND