By Brazil Stock Guide – Brazil’s securities regulator has intensified scrutiny of transactions involving Banco Master after identifying R$1.2 billion ($240 million) in investments routed to companies linked to the family of its controlling shareholder, Daniel Vorcaro, according to people familiar with the matter.
The probe resurfaced this week after the arrest of Fabiano Zettel, Vorcaro’s brother-in-law, on Wednesday (14). In August, the Comissão de Valores Mobiliários (CVM), Brazil’s securities watchdog, opened an investigation into investments made by Master through the purchase of commercial notes issued by companies tied to Natália Vorcaro, the banker’s sister and Zettel’s wife.
The transactions were carried out via the Jade fund, later renamed City 02, and involved commercial notes registered with Laqus Depositary of Securities. One of the companies, Clínica Mais Médicos, received R$361 million in funding despite operating out of a relatively small facility in Contagem, in the state of Minas Gerais, according to the investigation.
Regulators suspect the deals may have been structured fraudulently to channel funds back to members of the Vorcaro family. Banco Master said at the time that the investments cited had been “fully settled,” without providing further details.
Laqus said it complies strictly with all applicable regulatory requirements and cooperates with authorities when requested, subject to legal confidentiality rules. In a statement, the company said: “Supervisory and investigative procedures are part of the regular functioning of a healthy market and do not, in themselves, constitute any judgment on the infrastructures cited in journalistic reports.”
People with knowledge of the case said the CVM’s audit was only possible because the commercial notes were properly deposited, a legal requirement that is often not followed by most market registrars. As a neutral infrastructure provider, Laqus is responsible for registration, custody and safeguarding of securities, and does not participate in structuring deals or making investment decisions.
Even so, the depositary flagged concerns internally about small companies issuing unusually large volumes of commercial notes and requested documentation from Banco Master, which was subsequently provided.
Zettel’s businesses are not formally linked to Banco Master, though he has previously been involved in ventures connected to Vorcaro. He served as a director at Super Empreendimentos, a company that purchased a R$36 million property in Brasília known as Vorcaro’s “hub.”
Natália Vorcaro has also been cited in a separate CVM case opened in 2020 investigating alleged irregularities at a closed-end real estate investment fund called Brazil Realty. She was part of the management of Milo and MGI Desenvolvimento Imobiliário, two firms named in that proceeding.
Banco Master was placed under extrajudicial liquidation by Brazil’s central bank. The regulatory investigations remain ongoing.
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