SEC v. FERNANDO PASSOS, No. 1:22-cv-03156, Southern District of New York (Apr. 18, 2022) — Complaint

GREGORY S. KASPER
[email protected]
ZACHARY T. CARLYLE (pro hac vice application forthcoming)
[email protected]
SECURITIES AND EXCHANGE COMMISSION
1961 Stout Street, 17th Floor
Denver, Colorado 80294
(303) 844-1000

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION,

Plaintiff,

- against -

FERNANDO PASSOS,

Defendant.

 Civ. _____________________
ECF CASE

COMPLAINT FOR
INJUNCTIVE AND OTHER
RELIEF

JURY TRIAL
DEMANDED

Plaintiff United States Securities and Exchange Commission (the “SEC” or
“Commission”), for its Complaint against defendant Fernando Passos (“Passos” or “Defendant”),
alleges as follows:
SUMMARY
1. This is an SEC enforcement action against Passos, a former senior executive at
Brazilian reinsurance company IRB Brasil Resseguros S.A. (“IRB”), for planting a false story
with the media and disseminating false documents claiming that Berkshire Hathaway Inc.
(“Berkshire”) had recently made a substantial investment in IRB. In early February 2020, IRB’s
stock price fell significantly following a short-seller publicly releasing a letter questioning IRB’s
financial results. In late February and early March 2020, in an effort to boost IRB’s stock price,
Passos planted the false story that Berkshire had invested in IRB, fabricated related documents

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and directed that they be provided to the media, and made and caused IRB to make false and
misleading statements directly to investors and at least one securities analyst.
2. After the media reported the false Berkshire news following the close of trading
on February 26, 2020, IRB’s stock price rose by more than 6%. Following Berkshire’s public
denial that it had ever invested, or intended to invest, in IRB, the company’s stock price dropped
by more than 40% over the next two trading sessions.
3. As a result of Passos’s misconduct, Passos and IRB violated, and, in the
alternative, Passos aided and abetted IRB’s violations of, Section 10(b) of the Securities
Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17
C.F.R. § 240.10b-5].
NATURE OF THE PROCEEDINGS AND REQUESTED RELIEF
4. The Commission brings this action pursuant to the authority conferred on it by
Sections 21(d), 21(e) and 27 of the Exchange Act [15 U.S.C. § 78u(d)-(e) and 78aa]. The
Commission seeks a permanent injunction against Passos, enjoining him from engaging in the
transactions, acts, practices, and courses of business alleged in this Complaint; an officer and
director bar pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]; and civil
penalties pursuant to Section 20(d) of the Exchange Act [15 U.S.C. § 78u(d)]. The Commission
further seeks any other relief the Court may deem appropriate pursuant to Section 21(d)(5) of the
Exchange Act [15 U.S.C. § 78u(d)(5)].
JURISDICTION AND VENUE
5. This Court has jurisdiction over this action pursuant to Sections 21(d)(1),
21(d)(3)(A), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u(e),
and 78aa].

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6. Venue lies in this Court pursuant to Sections 21(d) and 27 of the Exchange Act
[15 U.S.C. § 78u(d) and 78aa]. Certain of the acts, practices, transactions, and courses of
business alleged in this Complaint occurred within the Southern District of New York, Passos
and IRB have transacted business in this District, and IRB investors who were harmed by the
fraud are located in this District.
 DEFENDANT
7. Fernando Passos is a resident of Sao Paulo, Brazil. At the time of the fraudulent
conduct alleged in this Complaint, Passos was IRB’s executive vice president of finance and
investor relations. In these roles, Passos was IRB’s most senior financial officer and was
responsible for IRB’s communications with investors.
RELATED PARTY
8. IRB Brasil Resseguros S.A. is a Brazilian reinsurance company with
headquarters in Rio de Janeiro, Brazil. IRB’s stock trades on the B3 S.A. - Brasil, Bolsa, Balcao
stock exchange (the “B3 Exchange”) located in Sao Paulo, Brazil. At the time of the fraudulent
conduct alleged herein, there were substantial U.S. investors in IRB whose holdings were valued
at approximately $1.6 billion.
FACTUAL ALLEGATIONS
9. In early February 2020, a Brazilian asset management firm that was short-selling
IRB stock released a letter questioning the reliability and sustainability of IRB’s financial results
(the “Short-Seller Letter”).
10. Among other things, the Short-Seller Letter cited to comments made by Warren
Buffett, the Chairman and chief executive officer (“CEO”) of Berkshire, which is a large publicly
traded U.S.-based holding company, about the reinsurance industry generally.
 Mr. Buffett and

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Berkshire are well-known investors and financial commentators concerning the insurance and
reinsurance industry, and Berkshire owns large insurance businesses.
11. In the wake of the Short-Seller Letter, the price of IRB’s stock declined
significantly.
12.   In an attempt to bolster IRB’s stock price and reassure investors that IRB was a
sound investment, Passos caused a false story to be disseminated to the media about Berkshire
making a large investment in IRB stock. Passos also made false and misleading statements to at
least four investors and at least one securities analyst about Berkshire becoming a substantial
investor in IRB.
I. Passos Spread False Information Through the Media and Made False and
Misleading Statements about Berkshire Investing in IRB.

13. Passos, acting in his capacity as IRB’s executive vice president of finance and
investor relations, engaged in several fraudulent and deceptive acts that operated as a fraud and
deceit on investors in connection with his dissemination of the false story concerning Berkshire’s
purported investment in IRB. In connection with his deceptive conduct, Passos also made false
and misleading statements to at least four investors and at least one securities analyst concerning
Berkshire’s purported investments in IRB.
14. Passos acted knowingly or recklessly in engaging in the fraudulent and deceptive
conduct and making the misstatements set forth below.
A. Passos Fabricated Documents and Spread a False Story about Berkshire
Investing in IRB to the Media.

15. On February 22, 2020, Passos sent text messages to IRB’s Communications and
Marketing Manager (the “Communications Manager”) stating that Berkshire was an investor in
IRB and that it had recently sharply increased its position in IRB stock. Passos noted that

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Berkshire was cited several times in the Short-Seller Letter and urged the Communications
Manager to work with IRB’s public relations firm to leak the purported information about
Berkshire’s investment to a journalist who would be willing to publish it without attribution to
IRB.
16. Passos’s claim that Berkshire was an IRB investor was false. Berkshire had not
recently increased its position in IRB stock and, in fact, held zero shares of IRB stock.
17. Passos knew or was reckless in not knowing that his claim that Berkshire was an
investor in IRB was false. For instance, on February 21, 2020, Passos requested and received an
email with an attached schedule of IRB’s shareholders as of February 18, 2020, organized from
largest to smallest shareholder. The shareholder list showed that Berkshire was not an IRB
investor.
18. To lend credibility to his false story concerning Berkshire’s investments in IRB
and increase the likelihood that it would be reported in the press, Passos fabricated a shareholder
list that showed Berkshire had made substantial purchases of IRB stock in February 2020 and
was the fourth largest shareholder of IRB as of February 18, 2020 (the “Fake Shareholder List”).
On February 22, 2020, Passos sent text messages with images of the Fake Shareholder List to the
Communications Manager, noting that a journalist could use the Fake Shareholder List to
confirm the purported news of Berkshire’s investment. Passos instructed the Communications
Manager to share it with IRB’s public relations firm and ultimately with the press. IRB’s
Communications Manager followed Passos’s instructions and forwarded the information about
Berkshire’s supposed investment in IRB and the Fake Shareholder List to IRB’s public relations
firm the same day.

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19. On February 23, 2020, Passos emailed the Fake Shareholder List to a member of
IRB’s board of directors who is also the Chairman of the board of directors of one of IRB’s
largest investors (“Investor A”). The Fake Shareholder List falsely showed that, as of February
18, 2020, Berkshire owned over 28 million shares of IRB stock and was one of its largest
shareholders.
20. On February 23, 2020, Passos also continued his efforts to get his false story
concerning Berkshire’s purported investment leaked to the press and reported to the public.
Passos sent numerous text messages to the Communications Manager suggesting specific
journalists to contact, through the public relations firm, about publishing the story. Passos also
texted his subordinate, IRB’s Director of Investor Relations, stating that they will plant, and
Passos will spread, the story that Berkshire bought 28 million shares of IRB. Passos further
elaborated that he planned to use an old email with a Berkshire executive to help build the story
about Berkshire’s supposed recent investment.
21. Passos followed through on his plan to bolster his false story when, later on
February 23, 2020, he sent IRB’s Communications Manager an image of an email he fabricated.
The email, dated February 21, 2020, purported to be from IRB’s CEO to a Berkshire executive,
thanking Berkshire for its recent investment in IRB (the “Fake Berkshire Email”). The
Communications Manager sent this additional supposed evidence of Berkshire’s investment to
IRB’s public relations firm the next day.
22. From February 24, 2020, to February 28, 2020, Passos attended meetings with
investors and securities analysts in Europe and the United States to reassure them of IRB’s sound
financial results, notwithstanding the recent Short-Seller Letter (the “Roadshow”). During this
time, Passos made false and misleading statements to investors and at least one securities analyst.

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23. On or about February 24, 2020, while Passos was in London for the Roadshow,
Passos misrepresented to an analyst and at least two investors that Berkshire had invested in IRB.
Specifically:
a. Passos met with a securities analyst who covered IRB (“Analyst A”) and falsely
represented that Berkshire had invested in IRB.
b. Passos represented to a large IRB investor (“Investor B”) that Berkshire had
recently purchased 28 million shares of IRB.
c. Passos met with another large IRB investor (“Investor C”) and represented to the
investor that Berkshire had invested in IRB.
24. While on the Roadshow, Passos also sent dozens of text messages to the
Communications Manager urging that the false information about Berkshire’s investment in IRB
be circulated to the press.
25. For instance, on February 26, while in New York, New York, Passos exchanged
dozens of text messages with the Communications Manager in which he continued to tell her to
contact various journalists through IRB’s public relations firm and spread the false information
concerning Berkshire’s substantial investment in IRB.
26. On or about February 26, IRB’s public relations firm, acting at the direction of the
Communications Manager, who was following Passos’s instructions, provided information about
Berkshire’s purported investment in IRB and sent the Fake Shareholder List to at least one
journalist. On the same day, when the Communications Manager relayed a journalist’s request
for the most up-to-date version of the IRB shareholder list, Passos, while in New York, sent the
Communications Manager images of the Fake Shareholder List and the Fake Berkshire Email.

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The Communications Manager then sent these images of the Fake Shareholder List and Fake
Berkshire Email to IRB’s public relations firm.
B. The Media Reported the Fake Berkshire Story, IRB’s Stock Price Increased,
and Passos and IRB Continued to Spread the False Information.

27. After trading closed on February 26, 2020, and then again on February 27,
Brazilian media reported Berkshire’s purported investment in IRB based on the false information
supplied by Passos through IRB’s public relations firm.
28. On February 27, U.S. media company Bloomberg issued a report titled “IRB
Climbs Amid Report Buffett’s Berkshire Increased Stake,” noting that the increase in IRB’s
stock price was “the most intraday on record” after a Brazilian newspaper “reported Warren
Buffett’s Berkshire Hathaway increased its stake in the firm amid the stock’s recent sell-off.”
29. From the close of trading on February 26 to the close of trading on February 27,
IRB’s stock price increased by more than 6%.
30. On February 28, 2020, Passos, while in Boston, Massachusetts for the Roadshow,
met with an institutional investor that held IRB shares (“Investor D”) and implied that Berkshire
had in fact recently invested in IRB.
31. On March 2, 2020, Passos and IRB continued to spread the false Berkshire
information. On March 2 during a call with securities analysts, IRB’s CEO, relying on
information provided by Passos and with Passos on the call, made statements indicating that
Berkshire had invested in IRB. On the call, Passos did nothing to correct the false statements that
Berkshire had invested in IRB. Later that day, the Brazilian media again reported the false
Berkshire information.

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C. Berkshire Denied that it Invested in IRB, IRB’s Stock Price Plunged, and
Passos Engaged in Additional Fraudulent and Deceptive Acts to Conceal the
Fraud.

32. After the market closed on March 3, 2020, Berkshire issued a press release
denying that it had ever invested, or had any intention of investing, in IRB.
33. IRB’s Director of Investor Relations forwarded a copy of Berkshire’s public
denial that night to Passos, to which Passos responded with the Portuguese equivalent of:
“Damn” and “We’re [expletive]!”
34. From the close of trading on March 3 through the close of trading on March 4,
IRB’s stock price dropped by more than 30%.
35. Passos attempted to cover up his fraudulent conduct by forwarding the Fake
Shareholder List to certain members of IRB’s Board of Directors on March 4 and falsely telling
them that he had received the Fake Shareholder List from IRB’s custodian bank overseeing share
ownership.
36. After the close of trading on March 4, 2020, IRB announced that Passos and
IRB’s CEO had resigned.
37. On March 5, IRB’s stock price continued to drop and closed down over 40% from
the close of trading on March 3, 2020, through the close of trading on March 5.
II. Passos and IRB Engaged in Fraudulent and Deceptive Acts.
38. As detailed above, Passos committed numerous fraudulent and deceptive acts in
connection with spreading false information about the purported Berkshire investment in IRB.
Among other things, Passos, knew or was reckless in not knowing that he:
a. Created the false Berkshire story and caused it to be disseminated to the public
through the media;

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b. Fabricated the Fake Shareholder List, emailed it to Investor A and certain other
members of IRB’s board of directors, and caused it to be disseminated to the
media through IRB’s public relations firm;
c. Fabricated and disseminated the Fake Berkshire Email to IRB’s Communications
Manager and public relations firm;
d. Falsely told members of IRB’s board of directors that he had received the Fake
Shareholder List from the custodian bank overseeing the company’s
shareholdings;
e. Made false and misleading statements to at least four investors (Investors A, B, C,
D) and one securities analyst (Analyst A) concerning Berkshire’s purported
investment in IRB.
f. Disseminated false and misleading information about Berkshire’s supposed
investment in IRB to securities analysts through IRB’s CEO who repeated the
false Berkshire investment information Passos had provided to him.
39. Passos engaged in the fraudulent and deceptive acts detailed above while he was
IRB’s most senior financial officer and the IRB officer responsible for investor communications.
As a result, IRB, through Passos, engaged in a fraud and Passos’s knowledge or recklessness
may be imputed to IRB.
III. Passos and IRB Made Material Misstatements and Omissions.

40. As detailed above, Passos made false and misleading statements to at least four
investors (Investors A, B, C, D) and one securities analyst (Analyst A).
41. Passos’s statements to the Investors and Analyst concerning Berkshire’s
investment in IRB were false and misleading when made and Passos knew or was reckless in not

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knowing that his statements about Berkshire’s purported investment in IRB were false and
misleading. Berkshire had not invested in IRB and, on February 21, 2020, Passos received a
shareholder list that showed Berkshire was not an IRB shareholder.
42. The false and misleading statements made by Passos, and IRB through Passos,
concerning Berkshire’s purported investment in IRB were material. Berkshire and its Chairman
and CEO, Warren Buffet, are well-known investors and Berkshire owns large insurance
businesses. When the false information regarding Berkshire’s investment was reported to the
public, IRB’s stock price rose approximately 6%. Following Berkshire’s denial that it had ever
invested, or had any intention of investing, in IRB, and the resignations of Passos and IRB’s
CEO, IRB’s stock price decreased by more than 40%. A reasonable investor would consider
Berkshire’s purported investment in IRB important information when deciding to purchase, hold,
or sell IRB stock.
43. Passos made the false and misleading statements while acting as IRB’s most
senior financial officer and the IRB officer responsible for investor communications. As a result,
IRB, through Passos, also made the false and misleading statements. Passos knew or was
reckless in not knowing that the statements were false. Passos’s knowledge or recklessness may
be imputed to IRB.
IV. Passos’s and IRB’s Conduct was in Connection with the Purchase or Sale of
Securities.

44. At the time Passos, and IRB, through Passos, engaged in fraudulent and deceptive
acts and made false and misleading statements concerning Berkshire’s purported investment in
IRB, IRB’s stock was publicly trading on the B3 Exchange. Investors, including certain U.S.
investors, purchased shares of IRB stock while the false Berkshire information was in the public
domain and had not yet been corrected by Berkshire. Passos, and IRB through Passos, made false

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and misleading statements to investors in IRB stock and at least one securities analyst regarding
Berkshire’s supposed investment, including during meetings about IRB’s reported financial
results and business prospects. Accordingly, Passos’s and IRB’s fraudulent and deceptive
conduct and false and misleading statements were in connection with the purchase or sale of
IRB’s securities.
45. In connection with the conduct alleged in this Complaint, Passos and IRB,
directly or indirectly, made use of the means or instrumentalities of interstate commerce, or of
the mails, including sending text messages to facilitate the dissemination of the false Berkshire
news to the media and forwarding the Fake Shareholder List and Fake Berkshire Email, while
Passos was in the United States.
V. Passos and IRB Engaged in Conduct in the United States that Constitutes
Significant Steps in Furtherance of their Violations and Their Conduct had a
Foreseeable Substantial Effect Within the United States.

46. The misconduct alleged in this complaint had foreseeable substantial effects on
investors in the United States. These effects were foreseeable to Passos and IRB because, among
other reasons, at or around the time Passos began engaging in the misconduct that is the subject
of this Complaint, Passos received a shareholder list that showed U.S. shareholders held
significant investments in IRB stock. U.S. investors’ holdings of IRB stock were valued at
approximately $1.6 billion at the time of the fraudulent conduct alleged in this Complaint.
47. Passos, and IRB through Passos, took significant steps in furtherance of their
fraud while in the United States, including sending text messages with the Fake Shareholder List
and Fake Berkshire Email from New York, New York, and misleading an institutional investor
regarding Berkshire’s investment in IRB at a meeting in Boston, Massachusetts. In addition,

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Passos sent dozens of text messages from the United States to facilitate the dissemination of the
false Berkshire news to the media.
VI.  In the Alternative, Passos Aided and Abetted IRB’s Fraud.

48. As detailed above, IRB, through Passos, engaged in fraudulent and deceptive
conduct and made fraudulent false and misleading statements. Passos knowingly or recklessly
substantially assisted IRB’s fraudulent conduct and misstatements by engaging in the acts and
making the misstatements described in this Complaint.
FIRST CLAIM FOR RELIEF
Violation of Exchange Act Section 10(b) and Rule 10b-5 Thereunder

49. The Commission realleges and incorporates by reference paragraphs 1 through
47, as though fully set forth herein.
50. Passos, directly or indirectly, acting with scienter, by use of the means or
instrumentalities of interstate commerce, or of the mails, or of a facility of a national securities
exchange, in connection with the purchase or sale of a security: employed devices, schemes or
artifices to defraud; made untrue statements of a material fact or omitted to state a material fact
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading; and engaged in acts, practices, or courses of business which operated
or would operate as a fraud or deceit upon another person.
51. By engaging in the conduct described above, Passos violated and, unless
restrained and enjoined, will again violate Section 10(b) of the Exchange Act [15 U.S.C. §
78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
SECOND CLAIM FOR RELIEF
Aiding and Abetting IRB’s Violations of Exchange Act Section 10(b)
and Rule 10b-5 Thereunder
(In the Alternative)

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52. The Commission realleges and incorporates by reference paragraphs 1 through
48, as though fully set forth herein.
53. IRB, directly or indirectly, acting with scienter, by use of the means or
instrumentalities of interstate commerce, or of the mails, or of a facility of a national securities
exchange, in connection with the purchase or sale of a security: employed devices, schemes or
artifices to defraud; made untrue statements of a material fact or omitted to state a material fact
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading; and engaged in acts, practices, or courses of business which operated
or would operate as a fraud or deceit upon another person.
54. By engaging in the conduct described above, Passos aided and abetted the fraud
violations of IRB, in that he knowingly or recklessly provided substantial assistance to IRB in
committing these violations.
55. By reason of the foregoing, Passos aided and abetted and, unless restrained and
enjoined, will again aid and abet, violations of Section 10(b) of the Exchange Act [15 U.S.C. §
78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
RELIEF SOUGHT
WHEREFORE, the Commission respectfully requests that this Court:
I.
Find that Passos committed the violations alleged in this Complaint;
II.
Enter an Injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil
Procedure, permanently restraining and enjoining Passos from violating, directly or indirectly,
the laws and rules alleged in this Complaint;

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III.
Order that Passos be permanently prohibited from acting as an officer or director of any
public company pursuant to Section 21(d)(2) of the Exchange Act;
IV.
Order that Passos pay civil money penalties pursuant to Section 20(d) of the Exchange
Act [15 U.S.C. § 78u(d)], in an amount to be determined by the Court, plus post-judgment
interest;
V.
Grant such other relief as this Court may deem just or appropriate.

JURY DEMAND
The Commission demands a trial by jury on all claims so triable.

Dated: April 18, 2022   S/ Gregory A. Kasper________________

Gregory A. Kasper (NY 2735405; SDNY GK6596)
Regional Trial Counsel
Zachary T. Carlyle (pro hac vice application
forthcoming)
Senior Trial Counsel
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
1961 Stout Street, 17th Floor
Denver, Colorado 80294
(303) 844-1000
[email protected]
[email protected]

GREGORY S. KASPER 
[email protected] 
ZACHARY T. CARLYLE (pro hac vice application forthcoming) 
[email protected] 
SECURITIES AND EXCHANGE COMMISSION 
1961 Stout Street, 17th Floor 
Denver, Colorado 80294 
(303) 844-1000 
 
UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
 
 
UNITED STATES SECURITIES AND EXCHANGE 
COMMISSION, 
 

Plaintiff, 
 

- against - 
 
FERNANDO PASSOS, 
 

Defendant. 
 

 
 Civ. _____________________ 

ECF CASE 
 

COMPLAINT FOR 
INJUNCTIVE AND OTHER 

RELIEF 
 

JURY TRIAL  
DEMANDED 

 
 
 

 
Plaintiff United States Securities and Exchange Commission (the “SEC” or 

“Commission”), for its Complaint against defendant Fernando Passos (“Passos” or “Defendant”), 

alleges as follows: 

SUMMARY 

1. This is an SEC enforcement action against Passos, a former senior executive at 

Brazilian reinsurance company IRB Brasil Resseguros S.A. (“IRB”), for planting a false story 

with the media and disseminating false documents claiming that Berkshire Hathaway Inc. 

(“Berkshire”) had recently made a substantial investment in IRB. In early February 2020, IRB’s 

stock price fell significantly following a short-seller publicly releasing a letter questioning IRB’s 

financial results. In late February and early March 2020, in an effort to boost IRB’s stock price, 

Passos planted the false story that Berkshire had invested in IRB, fabricated related documents 

Case 1:22-cv-03156   Document 1   Filed 04/18/22   Page 1 of 15



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and directed that they be provided to the media, and made and caused IRB to make false and 

misleading statements directly to investors and at least one securities analyst.  

2. After the media reported the false Berkshire news following the close of trading 

on February 26, 2020, IRB’s stock price rose by more than 6%. Following Berkshire’s public 

denial that it had ever invested, or intended to invest, in IRB, the company’s stock price dropped 

by more than 40% over the next two trading sessions.    

3. As a result of Passos’s misconduct, Passos and IRB violated, and, in the 

alternative, Passos aided and abetted IRB’s violations of, Section 10(b) of the Securities 

Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 

C.F.R. § 240.10b-5]. 

NATURE OF THE PROCEEDINGS AND REQUESTED RELIEF 

4. The Commission brings this action pursuant to the authority conferred on it by 

Sections 21(d), 21(e) and 27 of the Exchange Act [15 U.S.C. § 78u(d)-(e) and 78aa]. The 

Commission seeks a permanent injunction against Passos, enjoining him from engaging in the 

transactions, acts, practices, and courses of business alleged in this Complaint; an officer and 

director bar pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]; and civil 

penalties pursuant to Section 20(d) of the Exchange Act [15 U.S.C. § 78u(d)]. The Commission 

further seeks any other relief the Court may deem appropriate pursuant to Section 21(d)(5) of the 

Exchange Act [15 U.S.C. § 78u(d)(5)]. 

JURISDICTION AND VENUE 

5. This Court has jurisdiction over this action pursuant to Sections 21(d)(1), 

21(d)(3)(A), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u(e), 

and 78aa].  

Case 1:22-cv-03156   Document 1   Filed 04/18/22   Page 2 of 15



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6. Venue lies in this Court pursuant to Sections 21(d) and 27 of the Exchange Act 

[15 U.S.C. § 78u(d) and 78aa]. Certain of the acts, practices, transactions, and courses of 

business alleged in this Complaint occurred within the Southern District of New York, Passos 

and IRB have transacted business in this District, and IRB investors who were harmed by the 

fraud are located in this District. 

 DEFENDANT 

7. Fernando Passos is a resident of Sao Paulo, Brazil. At the time of the fraudulent 

conduct alleged in this Complaint, Passos was IRB’s executive vice president of finance and 

investor relations. In these roles, Passos was IRB’s most senior financial officer and was 

responsible for IRB’s communications with investors. 

RELATED PARTY 

8. IRB Brasil Resseguros S.A. is a Brazilian reinsurance company with 

headquarters in Rio de Janeiro, Brazil. IRB’s stock trades on the B3 S.A. - Brasil, Bolsa, Balcao 

stock exchange (the “B3 Exchange”) located in Sao Paulo, Brazil. At the time of the fraudulent 

conduct alleged herein, there were substantial U.S. investors in IRB whose holdings were valued 

at approximately $1.6 billion.  

FACTUAL ALLEGATIONS 

9. In early February 2020, a Brazilian asset management firm that was short-selling 

IRB stock released a letter questioning the reliability and sustainability of IRB’s financial results 

(the “Short-Seller Letter”).  

10. Among other things, the Short-Seller Letter cited to comments made by Warren 

Buffett, the Chairman and chief executive officer (“CEO”) of Berkshire, which is a large publicly 

traded U.S.-based holding company, about the reinsurance industry generally. Mr. Buffett and 

Case 1:22-cv-03156   Document 1   Filed 04/18/22   Page 3 of 15



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Berkshire are well-known investors and financial commentators concerning the insurance and 

reinsurance industry, and Berkshire owns large insurance businesses.     

11. In the wake of the Short-Seller Letter, the price of IRB’s stock declined 

significantly.  

12.   In an attempt to bolster IRB’s stock price and reassure investors that IRB was a 

sound investment, Passos caused a false story to be disseminated to the media about Berkshire 

making a large investment in IRB stock. Passos also made false and misleading statements to at 

least four investors and at least one securities analyst about Berkshire becoming a substantial 

investor in IRB. 

I. Passos Spread False Information Through the Media and Made False and 
Misleading Statements about Berkshire Investing in IRB. 

 
13. Passos, acting in his capacity as IRB’s executive vice president of finance and 

investor relations, engaged in several fraudulent and deceptive acts that operated as a fraud and 

deceit on investors in connection with his dissemination of the false story concerning Berkshire’s 

purported investment in IRB. In connection with his deceptive conduct, Passos also made false 

and misleading statements to at least four investors and at least one securities analyst concerning 

Berkshire’s purported investments in IRB.  

14. Passos acted knowingly or recklessly in engaging in the fraudulent and deceptive 

conduct and making the misstatements set forth below. 

A. Passos Fabricated Documents and Spread a False Story about Berkshire 
Investing in IRB to the Media. 

 
15. On February 22, 2020, Passos sent text messages to IRB’s Communications and 

Marketing Manager (the “Communications Manager”) stating that Berkshire was an investor in 

IRB and that it had recently sharply increased its position in IRB stock. Passos noted that 

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Berkshire was cited several times in the Short-Seller Letter and urged the Communications 

Manager to work with IRB’s public relations firm to leak the purported information about 

Berkshire’s investment to a journalist who would be willing to publish it without attribution to 

IRB. 

16. Passos’s claim that Berkshire was an IRB investor was false. Berkshire had not 

recently increased its position in IRB stock and, in fact, held zero shares of IRB stock. 

17. Passos knew or was reckless in not knowing that his claim that Berkshire was an 

investor in IRB was false. For instance, on February 21, 2020, Passos requested and received an 

email with an attached schedule of IRB’s shareholders as of February 18, 2020, organized from 

largest to smallest shareholder. The shareholder list showed that Berkshire was not an IRB 

investor.  

18. To lend credibility to his false story concerning Berkshire’s investments in IRB 

and increase the likelihood that it would be reported in the press, Passos fabricated a shareholder 

list that showed Berkshire had made substantial purchases of IRB stock in February 2020 and 

was the fourth largest shareholder of IRB as of February 18, 2020 (the “Fake Shareholder List”). 

On February 22, 2020, Passos sent text messages with images of the Fake Shareholder List to the 

Communications Manager, noting that a journalist could use the Fake Shareholder List to 

confirm the purported news of Berkshire’s investment. Passos instructed the Communications 

Manager to share it with IRB’s public relations firm and ultimately with the press. IRB’s 

Communications Manager followed Passos’s instructions and forwarded the information about 

Berkshire’s supposed investment in IRB and the Fake Shareholder List to IRB’s public relations 

firm the same day. 

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19. On February 23, 2020, Passos emailed the Fake Shareholder List to a member of 

IRB’s board of directors who is also the Chairman of the board of directors of one of IRB’s 

largest investors (“Investor A”). The Fake Shareholder List falsely showed that, as of February 

18, 2020, Berkshire owned over 28 million shares of IRB stock and was one of its largest 

shareholders. 

20. On February 23, 2020, Passos also continued his efforts to get his false story 

concerning Berkshire’s purported investment leaked to the press and reported to the public. 

Passos sent numerous text messages to the Communications Manager suggesting specific 

journalists to contact, through the public relations firm, about publishing the story. Passos also 

texted his subordinate, IRB’s Director of Investor Relations, stating that they will plant, and 

Passos will spread, the story that Berkshire bought 28 million shares of IRB. Passos further 

elaborated that he planned to use an old email with a Berkshire executive to help build the story 

about Berkshire’s supposed recent investment.  

21. Passos followed through on his plan to bolster his false story when, later on 

February 23, 2020, he sent IRB’s Communications Manager an image of an email he fabricated. 

The email, dated February 21, 2020, purported to be from IRB’s CEO to a Berkshire executive, 

thanking Berkshire for its recent investment in IRB (the “Fake Berkshire Email”). The 

Communications Manager sent this additional supposed evidence of Berkshire’s investment to 

IRB’s public relations firm the next day. 

22. From February 24, 2020, to February 28, 2020, Passos attended meetings with 

investors and securities analysts in Europe and the United States to reassure them of IRB’s sound 

financial results, notwithstanding the recent Short-Seller Letter (the “Roadshow”). During this 

time, Passos made false and misleading statements to investors and at least one securities analyst. 

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23. On or about February 24, 2020, while Passos was in London for the Roadshow, 

Passos misrepresented to an analyst and at least two investors that Berkshire had invested in IRB. 

Specifically: 

a. Passos met with a securities analyst who covered IRB (“Analyst A”) and falsely 

represented that Berkshire had invested in IRB.  

b. Passos represented to a large IRB investor (“Investor B”) that Berkshire had 

recently purchased 28 million shares of IRB.  

c. Passos met with another large IRB investor (“Investor C”) and represented to the 

investor that Berkshire had invested in IRB.  

24. While on the Roadshow, Passos also sent dozens of text messages to the 

Communications Manager urging that the false information about Berkshire’s investment in IRB 

be circulated to the press.  

25. For instance, on February 26, while in New York, New York, Passos exchanged 

dozens of text messages with the Communications Manager in which he continued to tell her to 

contact various journalists through IRB’s public relations firm and spread the false information 

concerning Berkshire’s substantial investment in IRB.  

26. On or about February 26, IRB’s public relations firm, acting at the direction of the 

Communications Manager, who was following Passos’s instructions, provided information about 

Berkshire’s purported investment in IRB and sent the Fake Shareholder List to at least one 

journalist. On the same day, when the Communications Manager relayed a journalist’s request 

for the most up-to-date version of the IRB shareholder list, Passos, while in New York, sent the 

Communications Manager images of the Fake Shareholder List and the Fake Berkshire Email. 

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The Communications Manager then sent these images of the Fake Shareholder List and Fake 

Berkshire Email to IRB’s public relations firm.  

B. The Media Reported the Fake Berkshire Story, IRB’s Stock Price Increased, 
and Passos and IRB Continued to Spread the False Information. 

 
27. After trading closed on February 26, 2020, and then again on February 27, 

Brazilian media reported Berkshire’s purported investment in IRB based on the false information 

supplied by Passos through IRB’s public relations firm. 

28. On February 27, U.S. media company Bloomberg issued a report titled “IRB 

Climbs Amid Report Buffett’s Berkshire Increased Stake,” noting that the increase in IRB’s 

stock price was “the most intraday on record” after a Brazilian newspaper “reported Warren 

Buffett’s Berkshire Hathaway increased its stake in the firm amid the stock’s recent sell-off.” 

29. From the close of trading on February 26 to the close of trading on February 27, 

IRB’s stock price increased by more than 6%. 

30. On February 28, 2020, Passos, while in Boston, Massachusetts for the Roadshow, 

met with an institutional investor that held IRB shares (“Investor D”) and implied that Berkshire 

had in fact recently invested in IRB. 

31. On March 2, 2020, Passos and IRB continued to spread the false Berkshire 

information. On March 2 during a call with securities analysts, IRB’s CEO, relying on 

information provided by Passos and with Passos on the call, made statements indicating that 

Berkshire had invested in IRB. On the call, Passos did nothing to correct the false statements that 

Berkshire had invested in IRB. Later that day, the Brazilian media again reported the false 

Berkshire information. 

 

 

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C. Berkshire Denied that it Invested in IRB, IRB’s Stock Price Plunged, and 
Passos Engaged in Additional Fraudulent and Deceptive Acts to Conceal the 
Fraud. 

 
32. After the market closed on March 3, 2020, Berkshire issued a press release 

denying that it had ever invested, or had any intention of investing, in IRB. 

33. IRB’s Director of Investor Relations forwarded a copy of Berkshire’s public 

denial that night to Passos, to which Passos responded with the Portuguese equivalent of: 

“Damn” and “We’re [expletive]!”  

34. From the close of trading on March 3 through the close of trading on March 4, 

IRB’s stock price dropped by more than 30%. 

35. Passos attempted to cover up his fraudulent conduct by forwarding the Fake 

Shareholder List to certain members of IRB’s Board of Directors on March 4 and falsely telling 

them that he had received the Fake Shareholder List from IRB’s custodian bank overseeing share 

ownership. 

36. After the close of trading on March 4, 2020, IRB announced that Passos and 

IRB’s CEO had resigned. 

37. On March 5, IRB’s stock price continued to drop and closed down over 40% from 

the close of trading on March 3, 2020, through the close of trading on March 5. 

II. Passos and IRB Engaged in Fraudulent and Deceptive Acts. 

38. As detailed above, Passos committed numerous fraudulent and deceptive acts in 

connection with spreading false information about the purported Berkshire investment in IRB. 

Among other things, Passos, knew or was reckless in not knowing that he: 

a. Created the false Berkshire story and caused it to be disseminated to the public 

through the media; 

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b. Fabricated the Fake Shareholder List, emailed it to Investor A and certain other 

members of IRB’s board of directors, and caused it to be disseminated to the 

media through IRB’s public relations firm; 

c. Fabricated and disseminated the Fake Berkshire Email to IRB’s Communications 

Manager and public relations firm; 

d. Falsely told members of IRB’s board of directors that he had received the Fake 

Shareholder List from the custodian bank overseeing the company’s 

shareholdings; 

e. Made false and misleading statements to at least four investors (Investors A, B, C, 

D) and one securities analyst (Analyst A) concerning Berkshire’s purported 

investment in IRB. 

f. Disseminated false and misleading information about Berkshire’s supposed 

investment in IRB to securities analysts through IRB’s CEO who repeated the 

false Berkshire investment information Passos had provided to him. 

39. Passos engaged in the fraudulent and deceptive acts detailed above while he was 

IRB’s most senior financial officer and the IRB officer responsible for investor communications. 

As a result, IRB, through Passos, engaged in a fraud and Passos’s knowledge or recklessness 

may be imputed to IRB. 

III. Passos and IRB Made Material Misstatements and Omissions. 
 

40. As detailed above, Passos made false and misleading statements to at least four 

investors (Investors A, B, C, D) and one securities analyst (Analyst A). 

41. Passos’s statements to the Investors and Analyst concerning Berkshire’s 

investment in IRB were false and misleading when made and Passos knew or was reckless in not 

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knowing that his statements about Berkshire’s purported investment in IRB were false and 

misleading. Berkshire had not invested in IRB and, on February 21, 2020, Passos received a 

shareholder list that showed Berkshire was not an IRB shareholder. 

42. The false and misleading statements made by Passos, and IRB through Passos, 

concerning Berkshire’s purported investment in IRB were material. Berkshire and its Chairman 

and CEO, Warren Buffet, are well-known investors and Berkshire owns large insurance 

businesses. When the false information regarding Berkshire’s investment was reported to the 

public, IRB’s stock price rose approximately 6%. Following Berkshire’s denial that it had ever 

invested, or had any intention of investing, in IRB, and the resignations of Passos and IRB’s 

CEO, IRB’s stock price decreased by more than 40%. A reasonable investor would consider 

Berkshire’s purported investment in IRB important information when deciding to purchase, hold, 

or sell IRB stock. 

43. Passos made the false and misleading statements while acting as IRB’s most 

senior financial officer and the IRB officer responsible for investor communications. As a result, 

IRB, through Passos, also made the false and misleading statements. Passos knew or was 

reckless in not knowing that the statements were false. Passos’s knowledge or recklessness may 

be imputed to IRB. 

IV. Passos’s and IRB’s Conduct was in Connection with the Purchase or Sale of 
Securities. 

 
44. At the time Passos, and IRB, through Passos, engaged in fraudulent and deceptive 

acts and made false and misleading statements concerning Berkshire’s purported investment in 

IRB, IRB’s stock was publicly trading on the B3 Exchange. Investors, including certain U.S. 

investors, purchased shares of IRB stock while the false Berkshire information was in the public 

domain and had not yet been corrected by Berkshire. Passos, and IRB through Passos, made false 

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and misleading statements to investors in IRB stock and at least one securities analyst regarding 

Berkshire’s supposed investment, including during meetings about IRB’s reported financial 

results and business prospects. Accordingly, Passos’s and IRB’s fraudulent and deceptive 

conduct and false and misleading statements were in connection with the purchase or sale of 

IRB’s securities. 

45. In connection with the conduct alleged in this Complaint, Passos and IRB, 

directly or indirectly, made use of the means or instrumentalities of interstate commerce, or of 

the mails, including sending text messages to facilitate the dissemination of the false Berkshire 

news to the media and forwarding the Fake Shareholder List and Fake Berkshire Email, while 

Passos was in the United States. 

V. Passos and IRB Engaged in Conduct in the United States that Constitutes 
Significant Steps in Furtherance of their Violations and Their Conduct had a 
Foreseeable Substantial Effect Within the United States.   

 
46. The misconduct alleged in this complaint had foreseeable substantial effects on 

investors in the United States. These effects were foreseeable to Passos and IRB because, among 

other reasons, at or around the time Passos began engaging in the misconduct that is the subject 

of this Complaint, Passos received a shareholder list that showed U.S. shareholders held 

significant investments in IRB stock. U.S. investors’ holdings of IRB stock were valued at 

approximately $1.6 billion at the time of the fraudulent conduct alleged in this Complaint. 

47. Passos, and IRB through Passos, took significant steps in furtherance of their 

fraud while in the United States, including sending text messages with the Fake Shareholder List 

and Fake Berkshire Email from New York, New York, and misleading an institutional investor 

regarding Berkshire’s investment in IRB at a meeting in Boston, Massachusetts. In addition, 

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Passos sent dozens of text messages from the United States to facilitate the dissemination of the 

false Berkshire news to the media.  

VI.  In the Alternative, Passos Aided and Abetted IRB’s Fraud. 
 

48. As detailed above, IRB, through Passos, engaged in fraudulent and deceptive 

conduct and made fraudulent false and misleading statements. Passos knowingly or recklessly 

substantially assisted IRB’s fraudulent conduct and misstatements by engaging in the acts and 

making the misstatements described in this Complaint.  

FIRST CLAIM FOR RELIEF 
Violation of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 

 
49. The Commission realleges and incorporates by reference paragraphs 1 through 

47, as though fully set forth herein. 

50. Passos, directly or indirectly, acting with scienter, by use of the means or 

instrumentalities of interstate commerce, or of the mails, or of a facility of a national securities 

exchange, in connection with the purchase or sale of a security: employed devices, schemes or 

artifices to defraud; made untrue statements of a material fact or omitted to state a material fact 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading; and engaged in acts, practices, or courses of business which operated 

or would operate as a fraud or deceit upon another person.  

51. By engaging in the conduct described above, Passos violated and, unless 

restrained and enjoined, will again violate Section 10(b) of the Exchange Act [15 U.S.C. § 

78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

SECOND CLAIM FOR RELIEF 
Aiding and Abetting IRB’s Violations of Exchange Act Section 10(b)  

and Rule 10b-5 Thereunder 
(In the Alternative) 

 

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52. The Commission realleges and incorporates by reference paragraphs 1 through 

48, as though fully set forth herein. 

53. IRB, directly or indirectly, acting with scienter, by use of the means or 

instrumentalities of interstate commerce, or of the mails, or of a facility of a national securities 

exchange, in connection with the purchase or sale of a security: employed devices, schemes or 

artifices to defraud; made untrue statements of a material fact or omitted to state a material fact 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading; and engaged in acts, practices, or courses of business which operated 

or would operate as a fraud or deceit upon another person.  

54. By engaging in the conduct described above, Passos aided and abetted the fraud 

violations of IRB, in that he knowingly or recklessly provided substantial assistance to IRB in 

committing these violations.   

55. By reason of the foregoing, Passos aided and abetted and, unless restrained and 

enjoined, will again aid and abet, violations of Section 10(b) of the Exchange Act [15 U.S.C. § 

78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].  

RELIEF SOUGHT 

WHEREFORE, the Commission respectfully requests that this Court: 

I. 

Find that Passos committed the violations alleged in this Complaint;  

II. 

Enter an Injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil 

Procedure, permanently restraining and enjoining Passos from violating, directly or indirectly, 

the laws and rules alleged in this Complaint;  

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III. 

Order that Passos be permanently prohibited from acting as an officer or director of any 

public company pursuant to Section 21(d)(2) of the Exchange Act;   

IV. 

Order that Passos pay civil money penalties pursuant to Section 20(d) of the Exchange 

Act [15 U.S.C. § 78u(d)], in an amount to be determined by the Court, plus post-judgment 

interest;  

V. 

Grant such other relief as this Court may deem just or appropriate. 

   

JURY DEMAND 

The Commission demands a trial by jury on all claims so triable. 

 
Dated: April 18, 2022   S/ Gregory A. Kasper________________ 

       
Gregory A. Kasper (NY 2735405; SDNY GK6596) 
Regional Trial Counsel 
Zachary T. Carlyle (pro hac vice application 
forthcoming) 
Senior Trial Counsel 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
1961 Stout Street, 17th Floor 
Denver, Colorado 80294 
(303) 844-1000 
[email protected] 
[email protected] 
 

 

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