|Proposal of executive fails to rectify insider trading case|
After consulting the CVM (Brazilian Securities and Exchange Commission), an executive officer and member of the Board of Directors of Lupatech S.A. presented the proposal of a settlement in order to avoid an administrative investigation due to the sale of common shares issued by Lupatech, less than 15 days before the quarterly report, which could be classified as an infraction of article 13 of CVM Instruction 358/02 and article 155, Paragraphs 1 and 2 of Law 6.404/76.
According to the officer, he himself was surprised with the sale of the shares, which was carried out by one of his investment consultants after the order to send funds to one of his companies. Lupatech’s officer states that he did not know that the funds originated from the sale of company-issued shares. He underscored that he did not receive any advantages from the operations, considering that the price of the shares increased in the days after the shares had been sold.
In its response, the Company Relations Superintendence (SEP) stated that, even though the operation was carried out by a third party, the shareholder is one responsible and must ensure compliance with the regulations imposed on a company’s directors. In addition, the SEP's findings indicate that after the period ended in which shares could not be traded, the price of Lupatech’s shares fell due to the poor results in the quarter, leading to a gain of approximately R$ 35,495.00 from the operation.
The proponent presented the settlement in order to expressly revoke the discretionary powers granted to his financial consultant, avoiding operations of the sort without the proponent’s approval. The Board rejected the settlement, believing that it does not fully comply with the applicable legal dispositions by not involving indemnification for possible damages caused to the market (Proceeding RJ 2009/4925, judged on September 15, 2009)