Fraud Hearing Set for Banco Master Case

Brazil's Supreme Court has scheduled a December 30 hearing in the fraud investigation involving lender Banco Master. The bank's owner and former high-ranking officials will attend. Following serious regulatory violations, the central bank halted Banco Master operations. A liquidation order led to a significant financial payout to creditors.

Brazil's Supreme Court will convene on December 30 for a crucial hearing amid allegations of fraud involving the midsized lender, Banco Master. The hearing, announced by Supreme Court Justice Dias Toffoli, forms part of a broader investigation targeting the bank's owner, Daniel Vorcaro, alongside former Brasilia state bank president, Paulo Henrique Costa, and Brazil's central bank supervisory head, Ailton de Aquino.

The central bank had ceased Banco Master's operations on November 18, citing severe regulatory breaches and liquidity crises. This action coincided with a Federal Police operation that exposed alleged fraudulent activities at the bank. Vorcaro, arrested earlier, has been released under habeas corpus, while Costa was similarly ousted from his role at BRB.

Banco Master's assets comprised a minimal percentage of Brazil's financial system, yet the fallout has been significant. The insurance entity, FGC, is now preparing to compensate the bank's creditors with an estimated 41 billion reais ($7.4 billion). In response to the unfolding scandal, BRB initiated an independent audit to thoroughly investigate the circumstances surrounding the bank's operation.

(With inputs from agencies.)