Last week,
the Brazilian website JOTA published an article about the Brazilian Securities Commission
– “CVM”´s intensions to investigate corruption cases in public corporations as
breach of fiduciary duties. This news may have great impact in current and
future cases involving shareholders and corporations. At this moment, Petrobras
could be the first target of the Regulatory Agency.
In one
hand, the arbitrations currently running between shareholders and Petrobras are
not public, in the other hand we might be able to have administrative
precedents available from the Brazilian Securities Commission.
Though CVM
is not competent to pursue criminal charges against a corporation it is in
charge of analyzing such facts in lights of a fiduciary duties perspective.
Last week, one of CVM directors stated to the specialized press that the
regulator could act in this case if the criminal behavior falls into a
violation of fiduciary duty.
In this
sense, if the director of a public corporation divert money from the company to
benefit other parties illegally and misrepresent those transactions in the
financial statements, it is clear that he violated his fiduciary duties to the
company and to the shareholders.
In sum, it
is important to point out that a CVM decision is administrative in nature, and
it does not automatically creates remedies to the shareholders. CVM may punish
the directors and managers who violated their duties with fees and other
sanctions, but shareholders who are still interested in seeking any recovery
for damages against Petrobras and its directors and managers will need to start
an arbitration or join one of the existing cases, if this joinder is still
possible.
The link to
JOTA in Portuguese: https://www.jota.info/tributos-e-empresas/mercado/cvm-resposta-casos-corrupcao-07062018
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