Rio State Audit Court Demands Explanation for $118 Million Investment in Unregistered Firms

The State Audit Court (TCE) has given Rioprevidência, the Rio de Janeiro state pension fund, five days to explain its decision to invest R$118 million in three investment funds managed by financial institutions not registered with the authority. This action appears to contravene resolutions from the National Monetary Council and Rioprevidência itself, which mandate prior accreditation of institutions to prevent fraud, mismanagement, and financial losses. These significant investments were made between December 24 and 29 of the previous year, a period following the revelation of a scandal involving nearly R$1 billion of Rioprevidência's assets placed in high-risk investments with Banco Master. The Banco Master issue, first reported on April 2, led to the Public Prosecutor's Office requesting the removal of Rioprevidência's interim president, Nicholas Cardoso. Cardoso, who assumed the interim role after the previous president, Deivis Antunes, was investigated by the Federal Police, was the Director of Investments at the time of these questionable allocations. He was subsequently dismissed from his interim presidency by the acting governor. In a related matter, the TCE has also requested an explanation for a R$99.4 million investment in the brokerage firm Mirae. The audit court noted that Mirae, described as a third-tier bank in a complaint, is actually a currency, securities, and stock brokerage firm lacking the systemic robustness suitable for managing state pension funds. The TCE emphasized that despite its nature, Rioprevidência must exercise due diligence to mitigate risks and preserve the pension fund's assets.