Violations of the instruction currently revoked by CVM Resolution 44 were related to the non-disclosure of material fact notices

In April, 2022, the board of the Brazilian Securities and Exchange Commission (CVM) ruled over four proposals[1] of settlement agreements arising from the non-disclosure of material notices and the negotiation with shares of publicly-held companies pending the disclosure of material fact notices. In all cases, the CVM’s board followed the favorable recommendation of the Committee for Settlement Agreements (CTC) on the proposals’ acceptance, with the consequential assumption, by the proponents, of monetary obligations ranging from R$ 21,132.00 to R$ 597,134.01, according to the case.

In the negotiation of the proposals, the following circumstances were taken into account when assessing the monetary obligation to be assumed by each proponent in its respective proceeding:

No. Proponent Theme and norm infringed Deviation parameter Initial proposal Circumstances

CTC Recommendation

  • 1.
Insider (tippee)

Use of relevant information not yet disclosed to the market

Infringement of the article. 13 of CVM Instruction 358 (then in force)

Traded Volume:

R$ 205,444.00

R$ 9,221.00[2]

Article. 86 of RCM 45[3]

Good track record of the proponent

Previous CTC decisions in similar cases

Late timing for presentation of the proposal for settlement agreement

Improvement of the proposal to

R$ 21,132.00

  • 2.

Investor Relations Officer


Alleged stock trading just before disclosure of material fact

Infringement of the article 13 ofCVM Instruction 358 (then in force)

Traded Volume:

R$ 302,672

R$ 38,814[4]

Article 86 of RCM 45[5]

Phase of the process (pre-sanctioning phase)

Conduct under Law 13.506/17 enforceability (more severe)

Conduct classified as a serious offence, pursuant to Group V of Annex 63 to the RCVM 45

Previous CTC decisions in similar cases

Good track record of the proponent

Improvement of the proposal to

R$ 170,000

  • 3.
Investor Relations Officer

Non-disclosure of material fact due to the occurrence of an atypical oscillation and leak of information regarding a previous confidential negotiation

Violation of articles 3 and 6, sole paragraph, of the CVM Instruction 358 (then in force)

Variation of the asset quotation (intraday):


R$ 250,000

Article 86 of RCM 45

Conduct after under Law 13.506/17 enforceability (more severe)

The of the company and its free float

Stage of the proceeding (pre-sanctioning phase)

Good track record of the proponent

Previous CTC decisions in similar cases

Improvement of the proposal to

R$ 340,000

  • 4.

Board of Directors Chairman


Trade of securities during blackout period

Infringement of the article 13 of CVM Instruction 358 (then in force)

Traded Volume:

R$ 887,207

1st Proposal:

R$ 20,000

2nd Proposal:

R$ 180,000

Article 86, caput, of ICVM 607 (then in force)

Conduct under Law 13.506/17 enforceability (more severe)

Stage of the process

Conduct classified as a serious offence, pursuant to Group V of Annex 63 to the RCVM 45

Previous CTC negotiations in similar cases

Good track record of the proponent

R$ 597,134.01, updated by the IPCA, from 11.03.2020, to the date of the effective payment

The Settlement Agreement is a legal statute provided for in RCVM 45 as an alternative method for the termination of CVM’s administrative proceedings. It can be proposed both in the pre-sanctioning phase and after the presentation of the term of indictment by the CVM.

According to article 81 of RCVM 45, "the execution of the Settlement Agreement does not imply confession as to the matter of fact, nor in recognition of the unlawful conduct examined". For this reason, it is not uncommon for this statute to be used as a defense strategy, since its legal effect is to terminate administrative demands before the CVM without the imposition of any official negative background on the proponents.

Despite the wide use in administrative proceedings, the settlement agreements as a method to close cases before the CVM implies that the proponent takes on obligations, which, in general, are of a monetary nature. Where appropriate, these obligations may also be linked to educational measures related to the capital markets, depending on the infringement investigated. Whatever the case, the proponent must always undertake to cease the practice of acts considered unlawful and correct irregularities, including by means of indemnification.

During the proceedings for the execution of a settlement agreement, the specialized federal prosecutor's office issues an opinion on the existence of legal impediments to the acceptance of the proposed settlement, the CTC negotiates the conditions of the proposal to be submitted to the CVM board and, finally, the CVM directors analyze, on a definitive basis, whether the execution of the settlement meets the objective desired by the applicable legislation, resolving on the acceptance or rejection of the proposal.

As described in the table above, in the presentation of the settlement agreement proposal and, mainly, during its negotiation with the CTC, the circumstances involved in the case are considered as a guidance for the CTC's recommendation to accept, suggest improvement or reject the proposal.

In the analysis of such circumstances, Article 86 of SCVM 45 provides that "the opportunity and convenience in executing the settlement, the nature and seriousness of the offences under the proceedings, the background of the accused or investigated or the good faith collaboration of those defendants, and the effective possibility of punishment in the present case" be considered.

Except for the standard followed by the CTC in previous negotiations in similar cases – an assessment that depends on the conduct under analysis in each case – the circumstances that usually operate in favor of negotiating less serious monetary obligations to proponents are:

  • good track record of the proponent evidenced by the absence of other ongoing or completed proceedings or investigations;
  • presentation of the proposal in the pre-sanctioning phase, which represents procedural efficiency for the public administration;
  • conduct occurred prior to Law 13.506/17 enforceability, which altered the guidelines of CVM sanctioning activities;
  • the low harm of the conduct according to Annex 63 to the RCVM 45; and
  • the reduced scope of the losses generated by the investigated conduct, among other circumstances.

Also in the context of the negotiation of monetary obligations, in the assessment of the proposals highlighted above, the CTC recommended the improvement of the initial proposals after having considered the circumstances of the case. Thus, it also aimed to establish a monetary obligation that is related to the conduct under analysis, in order to inhibit similar behaviors in the future.

As a matter of fact, it is possible to note that the CTC usually analyzes whether the monetary obligation is equivalent, at least, to the amount of the injury caused and/or advantage taken by the agent. In those cases where the value of injury or advantage is not significant, CTC can also find grounds in:

  • the percentage of deviation from the expected parameter;
  • in the traded volume of the asset; and/or
  • multiples (usually three times) of the injury and/or advantage of the injury.

Some data on the execution of settlement agreements by CVM over the years can be found in the Capital Market Observatory, a data mapping sponsored by a Brazilian association, which found, for example, in the records between 25/01/2000 and 26/03/2019, the existence of 601 cases with settlement agreement proposals, from which 351 were executed even if partially.

Of this total, more than 90% resulted in the assumption of monetary obligations. In addition, non-disclosure conducts generally lead the ranking of proceeding closed via settlement agreement, appearing in more than 70% of cases.[6]

For the cases highlighted herein, whose conducts were, in summary, related to violations of ICVM 358 (revoked by RCVM 44), the identification of the agent as tipper which obtains inside information from the source – or tippee – that obtains the information by other means, including by exchanging information with the tipper - was considered to negotiate the assumed monetary obligations.

Hence, in order to negotiate a settlement agreement proposal with the CTC, it is necessary to take into account that the CVM will find grounds on specific circumstances of the investigated conduct, such as similar precedents and the elements specific to the alleged infringement, as well as in general circumstances weighted in all cases, regardless of the infringement, such as the agent's background, the procedural phase, the injury of the conduct, magnitude and scope of the advantage and/or injury, among others.

Considering the relevance of the statute and its consequences for the sanctioning proceedings, the detailed strategic analysis of the convenience of submitting the proposal and a careful study of the conditions to be offered are essential to ensure greater legal certainty and better chances of success in its acceptance at the end.


[1] CVM PAS SEI 19957.0002923/2017-81 (ruled 05 De Abril, 2022), PA CVM SEI 19957.004542/2020-32 (ruled on April 5, 2022), CVM PA SEI 19957.000157/2021-05 (ruled on April 5, 2022) and PA SEI 19957.006367/2021-07 (ruled on April 12, 2022).

[2] Equivalent to the advantage obtained by the proponent indexed to monetary adjustment.

[3] Article 86 - In the decision of the proposal, the board must consider, among other elements, the opportunity and convenience of the settlement, the nature and severity of the offenses subject to the process, the track record of the accused or investigated or the good faith collaboration of these, and the effective possibility of punishment, in the specific case.

[4] Equivalent to three times the value of the advantage taken by the proponent according to the defense.

[5] See note 3 above.

[6] For more information, please visit: Capital Market Observatory.