Prosecutor Questions CVM Pick as Fictor IR Chief Seeks Open Board Seat

Overview

• Brazil’s MP-TCU submitted a representation urging the TCU to alert the Senate about Otto Lobo, citing doubts over decisions viewed as favorable to Banco Master, which is under Federal Police investigation for a R$12 billion credit scheme.
• President Luiz Inácio Lula da Silva nominated Lobo on January 7 to lead the CVM, and his confirmation hearing in the Senate’s Economic Affairs Committee is expected after the congressional recess in early February.
• Recent nominations of Lobo and attorney Igor Muniz drew criticism for being political rather than technical and reportedly ran counter to the Finance Ministry’s preferences, heightening concern over the regulator’s independence.
• André Vasconcellos, investor relations director at Fictor Alimentos, is openly campaigning in Brasília and on São Paulo’s Faria Lima for the CVM’s remaining board seat, according to O Globo and Valor.
• Vasconcellos says he would formally record an impediment to judge matters involving institutions tied to his recent work, including Fictor, Master and Eletrobras, as Fictor had proposed buying Banco Master a day before its liquidation and previously failed to demonstrate capacity to acquire Banco Porto Real.