Brazil Congress proposes market regulations after Americanas scandal

BRASILIA (Reuters) – Federal lawmakers in Brazil suggested several measures to boost accountability in the financial market, a report showed on Monday, after retailer Americanas this year revealed a multi-billion-dollar fraud.

In its final report on the Americanas inquiry, the committee of lawmakers proposed four measures for Congress to consider aimed at bolstering market regulations.

The report comes weeks after the committee heard the testimonies of former Americanas executives and experts. The retailer filed for bankruptcy protection in January and reported accounting irregularities of more than $5 billion.

The committee’s first measure proposes changes to laws governing the responsibility of company shareholders and managers.

A second proposal aims to improve access by independent audit companies to the financial information of the companies they are auditing.

The committee also proposes that Congress reforms the law regarding the crime of “patrimonial infidelity,” in which a member of the management compromises the company’s interests as well as those of the company’s partners or shareholders.

The fourth and final proposed measure aims to boost protections for whistleblowers in the country and broaden the scope of whistleblowing.

“(The proposal is that the whistleblower system) covers not only crimes against the public administration, but also crimes against the national financial system, against the capital market, or against other diffuse or collective interests,” the report said.

In June, Americanas Chief Executive Leonardo Coelho said before lawmakers that an independent report by the company’s legal advisers showed former executives, banks, and audit firms alleged involvement in “fraudulently altered” financial statements.

The inquiry did not suggest indicting anyone involved in the scandal.