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BRAZIL: Prosecutors Want BNY Mellon To Pay R$ 8.2 Billion To Postalis

(Agencia CMA Latam) - The Brazilian Public Prosecutor's Office in São Paulo (MPF-SP) filed a public civil lawsuit against BNY Mellon requesting that the company pays R$ 8.2 billion to Postalis, a social security fund from Brazilian Post employees.

According to the prosecutors, BNY Mellon violated local rules while managing Postalis resources, lowering the fund's asset volume and generating extra expenses to investors.

According to the MPF-SP, BNY Mellon was able to choose investments and buy and sell assets for Postalis. The bank was also in charge of vetoing transactions that could cause losses to the fund.

"However, over the last few years, assessments of the National Superintendence of Complementary Pension, responsible for the supervision of private pension entities, demonstrate the responsibility of the defendant for the damages to non-compliance with several rules of the legislation in force," the MPF-SP said in a statement.

According to prosecutors, several investments made by BNY exceeded the limits set in a resolution of the National Monetary Council (CMN).

"In some cases, Postalis's resources in some investment funds reached 49% of the fund's assets, when the legal limit would be 25%," said MPF-SP.

The lawsuit also says that BNY Mellon, as the manager of Postalis, made several overpriced investments, paying up to four times more for the assets. Also, by assuming the role of fiduciary administrator of the Postalis portfolio contractually, the bank would have conditioned the application of funds in exclusive funds administered by it, which would constitute a conflict of interest, said the prosecutors.

by Agencia CMA Latam

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