November/December 2023

_The November / December│2023 edition of our Newsletter has the following highlights:

– CVM acquits defendants accused of fraud in transaction to acquire control of a publicly held company

– B3 prohibits company from using the Novo Mercado seal

– CVM acquits members of the board of directors of a publicly held company from an accusation of violating the duty of diligence

_ CVM acquits defendants accused of fraud in transaction to acquire control of a publicly-held company


The Brazilian Securities and Exchange Commission (“CVM“) unanimously decided to acquit shareholders of a publicly held company (“Company“) from charges related to alleged fraudulent practices arising from a transaction that guaranteed control of the Company to one of the shareholders.


The shareholders were accused of colluding to transfer control of the Company to one of its shareholders, through buying and selling ordinary shares directly on the stock exchange, in order to appear that an original acquisition of control had occurred. This was done to avoid triggering protective measures and the obligation to carry out a public tender offer (“Tender Offer“), as stipulated in the Bylaws of the Company. To this end, the accusation was based on the premise that part of the shareholders held control.


CVM concluded that there was not enough evidence to prove that part of the shareholders accused of holding control could have fraudulently alienated it. In summary, CVM relied on four main reasons to support this understanding.


Firstly, one of the shareholders did not have the majority of votes in shareholders’ meetings, nor the power to elect the majority of the managers, in addition to evidence of lack of alignment among such shareholders.


Secondly, both the information on the sale of shares held by one of the relevant shareholders and the notifications of the shareholders acquiring stake in the Company informing about their interest in participating in its management, were public.


Thirdly, the buying and selling of shares were conducted on the stock exchange and, therefore, subject to the interference of third parties.


And fourthly, within the context of increasing the Company’s share capital, the acquiring shareholder chose to subscribe to a large number of shares issued by the Company, while the other shareholders chose not to subscribe to new shares.


In this context, CVM dismissed the need to hold a mandatory Tender Offer, since the acquisition of control in question did not result from a transfer of control by other shareholders, as required by the Brazilian Corporate Law (Law 6.404/76) and suggested by the accusation.


CVM Sanctioning Administrative Proceeding No. 19957.011669/2017-11, and more information can be accessed in Portuguese through the link below:


_ B3 prohibits Americanas from using the Novo Mercado seal


Americanas S.A. (“Americanas“) was prevented from using the Novo Mercado seal, B3’s (Brazil’s stock exchange) highest level of corporate governance. The decision is unprecedented since the listing standard was introduced in the Brazilian system and resulted in the fines for 22 executives, totaling R$ 6.2 million. The infractions are related to the effectiveness of Americanas’ supervision and control system, encompassing risk management, internal controls and auditing, in addition to the effectiveness in the analysis of the disclosed financial information.


This is the first formal decision since the case came to light in January, while CVM conducts sanctioning processes and more complex cases are being investigated in administrative inquiries without a defined deadline.


In practice, Americanas loses the right to use the Novo Mercado seal in its communications and in its trading ticker on the Stock Exchange. However, the Company will still be subject to all governance and trading rules applied to companies listed on the Novo Mercado.


Americanas has already announced that it will appeal the decision. Despite this, until a suspensive effect is granted to the appeal, the decision will remain in force until the Company (i) discloses a report from the independent committee that investigated the fraud, (ii) presents a financial statement with an independent auditor’s report without remarks, (iii) updates its financial statements, and (iv) presents a detailed report on internal controls without any deficiencies.


B3’s investigation began in January after Americanas revealed the fraud that led to the request for judicial recovery. Simultaneously, the company was excluded from the Ibovespa index. The decision highlights that these are not isolated failures, emphasizing that supervision and control structures, such as the audit committee, should have acted promptly in a scenario that is not isolated.


B3 also rejected the claim that members of the board of directors and the audit committee have the “right to rely” on the board of directors and the information presented by it, reinforcing that holding such positions requires “care and diligence, under penalty of accountability.” The decision also criticized specific inquiries from the audit committee, without in-depth investigations, considering them insufficient to fulfill the expected duty of diligence in a company listed on the Novo Mercado.

_CVM acquits members of the board of directors of a publicly held company from an accusation of violating the duty of diligence


CVM acquitted members of the board of directors of a listed company of an accusation of violating the duty of diligence provided for in article 153 of the Brazilian Corporate Law (Law 6.404/76). The accusation, in summary, claimed that the managers were not diligent because they failed to call an Extraordinary Shareholders’ Meeting to grant the right of withdrawal to shareholders after an alleged change in the company’s corporate purpose resulting from the sale of a controlled company (“Transaction“).


According to the accusation, as a result of implementing the Transaction, the company ceased to engage in activities analogous to its corporate purpose.


CVM’s board did not accept the accusation’s arguments as it understood that there was no alleged change in the corporate purpose. Firstly, because the company’s bylaws allowed it to carry out activities through participation in other companies. Secondly, through an analysis of the corporate purpose of other companies controlled by the company, which were related to the corporate purpose of the company.


CVM also pointed out that the Brazilian Corporate Law guarantees any shareholder the right to call an Extraordinary Shareholders’ Meeting when the management delays its call. However, this scenario was not even raised at the time by the shareholders of the company, which reinforces the absence of any change in its corporate purpose.


Finally, CVM also took into account the economic crisis that the  company was going through, which led to a process of divestment of various equity interest held by it temporarily.


After analyzing this set of factors, CVM acquitted the members of the board of directors.


CVM Sanctioning Administrative Proceeding No. 19957.003434/2020-42 can be accessed in Portuguese through the link below:

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Mudança da CVM demanda cuidados das companhias

A mudança de entendimento da Comissão de Valores Mobiliários (CVM) sobre o conflito de interesses vai exigir das companhias uma maior atenção.

Posted in: Uncategorized

Companhias de menor porte contam com flexibilizações

Companhias de menor porte passaram a contar com mais flexibilidade e potencial redução de custos no que diz respeito à publicação de suas demonstrações financeiras e à composição da alta administração.

Posted in: Uncategorized

Novo formulário de referência demanda atenção

Informações sobre aspectos ESG, climáticos e relacionados a diversidade social devem ser mais desafiadores para as companhias

Posted in: Uncategorized

CVM esclarece atuação com criptoativos

Os emissores de tokens que se enquadrarem como valores mobiliários e as ofertas públicas desses tokens estão sujeitos à regulamentação da Comissão de Valores Mobiliários (CVM), conforme o Parecer de Orientação 40 da autarquia, publicado em 11 de outubro.

Posted in: Uncategorized

November 2021

_the november│2021 edition of our Newsletter has the following highlight:

– CVM warns publicly held company’s officer for irregularities in the management of Stock Option Plan

– Understanding Shareholders’ Agreements and binding managers’ votes

_CVM warns publicly held company’s officer for irregularities in the management of Stock Option Plan


On October 14, 2021, the Brazilian Securities and Exchange Commission (“CVM”) judged CVM Sanctioning Process SEI 19957.003480/2021-22 to examine the responsibility of an officer and members of the Board of Directors of a publicly held company for an alleged breach of fiduciary duties in the performance of their attributions, in violation of articles 153 and 154 of the Brazilian Corporation Law.

The accusation arose from a request to interrupt an Extraordinary Shareholders’ Meeting by shareholders of the company, accompanied by several complaints, among them, the alleged irregularities in the management of the stock options plan (“Stock Options”).

The officer was accused of failing to perform his attributions in accordance with the company’s interests by means of: (i) failing to recognize the termination of Stock Options granted to officers upon their dismissals; and (ii) celebrating amendments to Stock Options agreements with employees under different conditions than those provided by the plan approved at the company’s shareholder meeting, particularly regarding the extension of the term for exercising the options in the event of dismissal by the company.

Regarding the first accusation, the officer was unanimously absolved by CVM’s board for lack of evidence. Regarding the second accusation, the reporting director of the case, Fernando Caio Galdi, understood that there was a violation of article 154 of the Brazilian Corporation Law, for the reasons summarized below:

• In the terms of article 168, 3rd paragraph, of the Brazilian Corporation Law, the granting of stock options to managers and employees of publicly held companies can only occur in accordance with a plan approved by shareholders in a shareholders’ meeting, therefore, the granting of stock options under conditions other than those foreseen in a plan approved by the company’s shareholders’ meeting is forbidden.

• The reporting director stated that it is perfectly legitimate for the shareholders’ meeting to establish only general guidelines regarding the most relevant aspects that must be observed when granting stock options, giving certain discretion to management to execute the stock option agreements, within the approved general premises. However, in the case in question, the plan provided a clear, objective and direct rule regarding the term for exercising the options in the event of dismissal by the company, consequently, said rule could not be relativized by the company’s management.

• In cases of alleged violation of art. 154, caput, of the Brazilian Corporation Law, according to the reporting director, CVM’s board must analyze the justifications brought by the manager to carry out certain transactions, evaluating if they are consistent with the social interest, avoiding excessively invasive approaches concerning the merits of the decisions which were taken.

• In the analyzed case, however, the reporting director declared that is up to who is judging the case to verify whether the conditions provided in the amendments were compatible or not with those approved by the company’s shareholders. Being incompatible with the provisions of the Brazilian Corporation Law the recognition that an officer would be more legitimate than the shareholders to determine which decision would best align with the company’s corporate interest.

• The conditions foreseen in the amendments regarding the term for exercising the stock options were different from those provided for in the approved plan, and by executing the plan approved by the shareholders’ meeting under conditions different from the original terms, the shareholders’ meeting’s authority was disregarded, at least in part.

Therefore, CVM’s board decided, by majority, to follow the vote of the reporting director and condemn the officer to a warning sentence.

The members of the board of directors were also accused of breach of the responsibility to exercise their duty of diligence, due to the lack of supervision of the officer’s actions as detailed above, however, the reporting director understood that it would not be reasonable to expect the defendants to review all the individual stock option agreements, nor the requests for exercise said stock options, except if warning signs that the plan was not being executed within the approved premises were identified, nevertheless, this exception was not proven when analyzing the case.

Regarding the accusation against the members of the board of directors, CVM’s board unanimously decided for their absolution.

More information regarding CVM Administrative Proceeding can be accessed in Portuguese through the link below:


_Understanding Shareholders’ Agreements and binding managers’ votes


Following the series of articles on shareholders’ agreements foreseen in article 118 of Law 6.404, of December 15, 1976 (Brazilian Corporation Law), we will address the political rights of shareholders specifically regarding the election of managers and the potentially binding their votes.


Election of managers

During the negotiation of shareholders’ agreements, it is not unusual to encounter discussions about the number of seats on the board of directors that will be filled by each shareholder and even how the election of officers will take place. It is common for them to specify which shareholder will appoint the chief executive officer, the chief financial officer, or another officer relevant to the business. In addition, in certain structures it is possible to identify clauses that require board members to vote on certain matters in accordance with voting instructions determined by the shareholders in a prior meeting.

Regarding the election of the members of the board of directors, the Brazilian Corporation Law provides as a general rule the election by majority vote of all members, with the possibility of multiple vote and separate vote for the election of members by minority shareholders. Nevertheless, it is possible that the shareholders undertake, by means of a shareholders’ agreement, to elect the members of the board of directors in a different manner, guaranteeing, for example, the right for minority shareholders to elect directors without the need for a multiple or separate vote system. This is a common request in shareholders’ agreements of family-owned companies as well as companies with investment funds as shareholders.


Binding of board member’s votes by shareholders

Regarding the voting orientation of directors by shareholders, including within the scope of the election of officers, the Brazilian Corporation Law expressly provides, since 2001, the possibility of binding the votes of members of the management, it states that the president of the shareholders’ meeting or of the collegiate deliberating body of the company shall not compute the vote cast in breach of a duly filed shareholders’ agreement in the company’s headquarters.

However, said legal provision has been subject of controversy since it was introduced in the law. It is argued that, by binding the managers’ vote to what has been agreed upon in a shareholders’ agreement, their freedom to vote and their independence would be put in jeopardy, in addition to their obligation to look after the company’s interests.

Faced with said controversy, there are three doctrinal conceptions on the matter:

  • favorable to binding votes: the main argument is that the shareholders’ agreement itself is representative of the corporate interest, in line with the 2nd paragraph of article 118 of the Brazilian Corporation Law, which provides that it is not possible to invoke said agreement to exempt shareholders from liability when exercising voting rights or controlling power.
  • favorable to binding votes: except for certain situations (that is, opposing to binding votes indiscriminately), among which we highlight illegality and violation of social interest.
  • against binding of managers’ votes, on the grounds that this would be incompatible with the best corporate governance practices.

Thus, although there are solid positions and arguments in the three aforementioned conceptions, the one which is favorable to binding votes with limits is the predominant one, presenting variations as to the extension and definition of such limits. Therefore, considering that managers are subject to the duties imposed by the Brazilian Corporation Law, notably the duties of diligence and loyalty, we understand that when they are faced with a binding voting guideline that may harm the company’s best interests, they should deliver their vote in a manner contrary to the voting guideline, subject to the manager’s being liable.

The text above was published in legislation and market session of Capital Aberto on October 27, 2021, and can be accessed in Portuguese through the link below: