Early Stage Financing

Early Stage Financing

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Damian H.

Damian

Best Practices for Investing in Cédulas de Crédito Bancário in Brazil Banco Morada: Intervention and The Principal-agent problem

Content Editor at Alternative Latin Investor

If you’ve not heard of Morada Bank, it was a spectacular bank failure wrought with fraud in April of 2011 that is still causing headaches for its investors and regulators. We believe that this fraud, perpetrated by Morada Bank and ultimately costing the Petrobras pension fund Petros’ R$72 million in losses, provides a heedful case study about what can go wrong with an investment in Brazil in general and in Cédulas de Crédito Bancário in particular. In this post, we will explore what happened, and try to understand how a rated national bank could have perpetrated this fraud. We will end with some thoughts on due diligence procedures and processing that will help prevent these types of artifices in the future.

If you’ve not heard of Morada Bank, it was a spectacular bank failure wrought with fraud in April of 2011 that is still causing headaches for its investors and regulators. We believe that this fraud, perpetrated by Morada Bank...

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  • June 27, 2012
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