SEC v. Fernando Passos, No. LR-25370, Southern District of New York (Apr. 18, 2022) — Press Release
raw: Fernando Passos, Civ. Action
Fernando Passos, Civ. Action, No. 1:22-cv-03156 (S.D.N.Y. Apr. 18, 2022)
The SEC charged former IRB Brasil Resseguros executive Fernando Passos with securities fraud for fabricating news of a Berkshire Hathaway investment to manipulate stock prices.
Fernando Passos, former executive vice president of IRB Brasil Resseguros S.A., faces SEC charges for disseminating false documents and stories regarding a Berkshire Hathaway investment. The alleged scheme caused IRB's stock to rise by over 6 percent before plummeting more than 40 percent following Berkshire's denial. The SEC is seeking civil money penalties and an officer and director bar for violations of Section 10(b) and Rule 10b-5.
The SEC has charged Fernando Passos, the former executive vice president of finance and investor relations at IRB Brasil Resseguros S.A., with orchestrating a stock manipulation scheme. In February 2020, Passos allegedly fabricated a story and created fake shareholder lists claiming that Berkshire Hathaway Inc. had made a substantial investment in the Brazilian reinsurance company. He is accused of communicating this false information to analysts and investors during meetings in the U.S. and the United Kingdom. Following the fraudulent media reports, IRB's stock price rose by more than 6 percent, but subsequently dropped by over 40 percent after Berkshire denied the investment. The SEC's complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, seeking civil penalties and an officer and director bar. Additionally, the Department of Justice has announced parallel criminal charges against Passos.
Exhibits & Attached Documents (2)
Extracted insights
- person civil money penalties
- person criminal charges
- agency Department of Justice
- person false documents
- person false information
- person fernando passos
- person gregory kasper
- person Ian Karpel
- person Jason Burt
- person jeffrey lyons
- agency Securities and Exchange Commission
- agency the sec's investigation
- person Zachary Carlyle
- Securities And Exchange Commission charges Fernando Passos
- Fernando Passos is former executive vice president of finance and investor relations
- Fernando Passos is former executive vice president of Brazilian reinsurance company IRB Brasil Resseguros S.A.
- Fernando Passos allegedly planted a false story
- Fernando Passos allegedly disseminated false documents
- Fernando Passos fabricated a story
- Fernando Passos created a fake shareholder list
- Fernando Passos communicated false information
- IRB rose by more than 6 percent
- IRB dropped by more than 40 percent
- Securities And Exchange Commission seeks civil money penalties
- Securities And Exchange Commission seeks an officer and director bar
- Department Of Justice announced criminal charges
- Jeffrey Lyons conducted the SEC's investigation
- Ian Karpel supervised the SEC's investigation
- Jason Burt supervised the SEC's investigation
- Zachary Carlyle led the litigation
- Gregory Kasper led the litigation
SEC Charges Senior Executive of Brazilian Company with Fraud Litigation Release No. 25370 / April 18, 2022 Securities and Exchange Commission v. Fernando Passos, Civ. Action, No. 1:22-cv-03156 (S.D.N.Y. filed April 18, 2022) The Securities and Exchange Commission announced charges against Fernando Passos, the former executive vice president of finance and investor relations of Brazilian reinsurance company IRB Brasil Resseguros S.A., for allegedly planting a false story with the media and disseminating false documents claiming that Berkshire Hathaway Inc. had recently made a substantial investment in IRB. According to the SEC's complaint, filed on April 18, 2022, Passos, concerned about the significant decline in IRB's stock price following a short seller's report questioning IRB's financial results, fabricated and then spread a story in February 2020 that Berkshire Hathaway Inc. had recently invested in IRB. The complaint further alleges that Passos created and shared with others a fake shareholder list that showed Berkshire had made substantial purchases of IRB stock. Passos also allegedly communicated the false information to analysts and investors during meetings in both the United Kingdom and the U.S. According to the complaint, IRB's stock price rose by more than 6 percent during the 24 hours following the Brazilian and U.S. media reports that Berkshire had invested in IRB and subsequently dropped by more than 40 percent after Berkshire denied a week later that it was an investor. The SEC's complaint, filed in U.S. District Court for the Southern District of New York, alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and seeks civil money penalties and an officer and director bar. In a parallel action, the Department of Justice announced criminal charges against Passos. The SEC's investigation, which is continuing, was conducted by Jeffrey Lyons and supervised by Ian Karpel and Jason Burt of the Denver Regional Office. The litigation against Passos is being led by Zachary Carlyle and Gregory Kasper. SEC Complaint
SEC Charges Senior Executive of Brazilian Company with Fraud Litigation Release No. 25370 / April 18, 2022 Securities and Exchange Commission v. Fernando Passos, Civ. Action, No. 1:22-cv-03156 (S.D.N.Y. filed April 18, 2022) The Securities and Exchange Commission announced charges against Fernando Passos, the former executive vice president of finance and investor relations of Brazilian reinsurance company IRB Brasil Resseguros S.A., for allegedly planting a false story with the media and disseminating false documents claiming that Berkshire Hathaway Inc. had recently made a substantial investment in IRB. According to the SEC's complaint, filed on April 18, 2022, Passos, concerned about the significant decline in IRB's stock price following a short seller's report questioning IRB's financial results, fabricated and then spread a story in February 2020 that Berkshire Hathaway Inc. had recently invested in IRB. The complaint further alleges that Passos created and shared with others a fake shareholder list that showed Berkshire had made substantial purchases of IRB stock. Passos also allegedly communicated the false information to analysts and investors during meetings in both the United Kingdom and the U.S. According to the complaint, IRB's stock price rose by more than 6 percent during the 24 hours following the Brazilian and U.S. media reports that Berkshire had invested in IRB and subsequently dropped by more than 40 percent after Berkshire denied a week later that it was an investor. The SEC's complaint, filed in U.S. District Court for the Southern District of New York, alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and seeks civil money penalties and an officer and director bar. In a parallel action, the Department of Justice announced criminal charges against Passos. The SEC's investigation, which is continuing, was conducted by Jeffrey Lyons and supervised by Ian Karpel and Jason Burt of the Denver Regional Office. The litigation against Passos is being led by Zachary Carlyle and Gregory Kasper. SEC Complaint