By Brazil Stock Guide – Brazil’s securities regulator CVM imposed total penalties of R$6.9 million on a former employee of BB Gestão de Recursos (BB Asset), the asset-management arm of Banco do Brasil (BBAS3.SA), and two relatives over alleged front-running involving trades on B3 (B3SA3.SA). The decision—reported by Investing.com—was unanimous and fined Marcelo da Cruz, his wife Noemi Nagasawa and his brother Maurício da Cruz R$2.3 million each.
According to the CVM’s case file, first flagged by BSM Supervisão de Mercado—B3’s market-surveillance unit—investigators found a pattern of day-trading by Nagasawa from January 2016 through October 2018 in which BB Asset–managed funds frequently appeared as counterparties. The reporting credits a rapporteur from CVM Director Marina Copola detailing how the trio allegedly profited by anticipating BB Asset orders.
CVM’s technical team said Marcelo da Cruz, then tasked with transmitting orders on behalf of BB Asset funds, provided information on instruments, prices and trade timing to his relatives, allowing them to place orders on the opposite side of the book ahead of the asset manager and lock in low-risk gains once the institutional flow hit the market. The file also indicates he could influence when BB Asset orders were forwarded to the trading desk, helping ensure execution right after the relatives’ orders.
BB Asset said in a statement the decision pertains solely to a former employee and that the firm is not a party to the proceeding. “The manager reaffirms its commitment to robust monitoring processes, risk management and governance, in line with the highest market standards,” the company said. Lawyers for the defendants did not comment by publication time.