By Brazil Stock Guide – The distribution of certificates of deposit issued by Banco Master has become the focus of a civil lawsuit that could test the boundaries of responsibility for Brazil’s largest investment platforms. The Brazilian Association for Consumer and Worker Protection (Abradecont) has asked prosecutors in Rio de Janeiro to assess whether XP Investimentos, BTG Pactual and Nubank failed to adequately disclose risks when selling the bank’s CDBs prior to its court-ordered liquidation.
Filed in Rio’s 6th Business Court and forwarded for review by the Rio de Janeiro Public Prosecutor’s Office, the lawsuit does not challenge the legality of the products themselves. Instead, it argues that the securities were marketed as low-risk investments by emphasizing protection from the Fundo Garantidor de Créditos—Brazil’s deposit insurance scheme—creating the perception of near-total safety for retail clients.
According to the filing, platforms went beyond a passive “marketplace” role and acted as financial intermediaries that implicitly endorsed the issuer by promoting its securities. In doing so, Abradecont says, distributors failed in their fiduciary and informational duties by downplaying the issuer’s fragilities and presenting fixed-income instruments with unusually high yields as suitable for conservative investors.
The dispute gained momentum after Banco Master was placed under extrajudicial liquidation by Brazil’s central bank in November 2025. The episode triggered one of the largest deposit-insurance events in the country’s history, with the FGC expected to reimburse around 800,000 investors for a total of R$40.6 billion. Coverage is capped at R$250,000 per taxpayer ID per financial conglomerate, leaving some investors exposed—particularly those who concentrated holdings above the limit or across entities within the same group.
Abradecont is seeking an injunction to halt any marketing that uses the FGC as a primary sales argument, as well as the creation of a court-mandated escrow to secure compensation for losses not covered by the fund and for collective moral damages. The association has also asked the court to include Will Bank, controlled by Banco Master and liquidated subsequently, broadening the scope of scrutiny over group-level risk and disclosure.
Responses from the defendants diverge. Nubank said it stopped offering Banco Master CDBs in 2024 and noted that clients select products autonomously on its platform, without the use of investment advisers. XP and BTG had not publicly commented at the time of publication.
Beyond the immediate litigation, the case underscores a structural tension in Brazil’s retail investment boom: how far platforms’ responsibility extends in product curation and suitability. For regulators and courts, the outcome may help define whether deposit insurance—designed as a systemic stability tool—can lawfully double as a sales pitch in the race for yield.
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