US Charges Former CFO of Brazilian Reinsurance Company With Fraud - DOJ

WASHINGTON (Pakistan Point News / Sputnik - 19th April, 2022) The US Department of Justice unsealed on Monday a superseding indictment charging the former chief financial officer of Brazilian reinsurance company IRB with devising and executing a scheme to fraudulently prop up his firm's stock price.

"(Fernando) Passos allegedly developed and executed a scheme to mislead shareholders and the investing public by disseminating and causing to be disseminated materially false information that Berkshire Hathaway had invested in IRB, despite knowing the U.S. investment firm had not made such an investment," prosecutors said. "Passos discussed his plans to spread this materially false information with IRB investor relations employees."

Prosecutors said the 39-year-old fabricated documents and used inaccurate information to support his claims.

Media outlets in Brazil and the US published that false information and a number of IRB's directors and investors were also fooled. As a result, in March 2020, Berkshire Hathaway had to send out a press release rebutting Passos' false statements. Following Berkshire Hathaway's statement of denial, IRB's stock price tumbled, resulting in substantial losses to shareholders. Brazil-based IRB trades on Brazil's B3 exchange and has shareholders globally, including in the United States, prosecutors said.

Passos is charged with one count of securities fraud and three counts of wire fraud. If convicted, he faces up to 20 years behind bars on each count. He has not been apprehended.