In a recent decision, the Brazilian Securities and Exchange Commission (CVM) applied a fine of BRL450,000 in a case involving the irregular public offering of investment through a digital platform.
In it, potential investors were invited to make a contribution of capital upon promise of yield of 1.5% per month on the amount invested, for a period of 24 months.
The offer involved collective investment contracts (CICs), regulated at the time of the events by CVM Instruction 400 – today repealed by CVM Resolution 160. The company promoted the real estate developments through their social midea and digital platforms.
The argument brought by the company that made the offers is that the offers does not involve the capital market; it was exclusively an activity within the real estate market and because of that was not submitted to CVM supervision.
It turns out that CVM Resolution 160 is quite specific when it addresses the hypotheses in which the registration of an offer must be conducted, in the same way that it clearly provides for the cases of dismissal. For the CVM, the following points must be analyzed: (i) the existence of an investment, (ii) the formalization of the investment in a agreement, (iii) the collective nature of the investment, (iv) the right to participate in some form of economic result resulting from the investment, (v) that this remuneration originates from the efforts of the entrepreneur or third parties, and (vi) the occurrence of a public offering of such contracts.
Considering the consistent supervision that the CVM has been carrying out in the real estate market, as well as the growing offer of projects via social media, it is essential that a thorough analysis of the characteristics of the project be carried out so that it is possible to proceed, in applicable cases, with the dismissal request provided for in CVM Resolution 160, otherwise it will be mandatory to register the investment offer.
