SEC v. Fernando Passos — U.S. Securities and Exchange Commission Litigation Release No. 26493, dated February 26, 2026.
The SEC charged Fernando Passos, a former executive at Brazilian reinsurance company IRB Brasil Resseguros S.A., with fraud. Passos allegedly spread a false story that Berkshire Hathaway was investing in IRB to boost the company's stock price after a short-seller report. He disseminated fabricated documents and made false statements to investors and analysts. Following Berkshire's denial, IRB's stock price plummeted.
In Plain English
Imagine a company's stock price is falling because someone questioned its finances. A top executive, Fernando Passos, wanted to make the stock look good again. So, he made up a story that a famous investor, Berkshire Hathaway, was buying a lot of the company's stock. He even created fake papers to support this lie and told it to reporters and investors. When the famous investor denied the story, the company's stock price crashed even harder.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
How the Alleged Scheme Worked
- Short Seller Report In early February 2020, a short-selling firm released a letter questioning the financial results of IRB Brasil Resseguros S.A. (IRB), a Brazilian reinsurance company. This report caused IRB's stock price to decline significantly.
- Executive's Motivation Fernando Passos, IRB's former executive vice president of finance and investor relations, sought to reverse the stock price decline and reassure investors. He aimed to boost IRB's stock price following the negative report.
- Fabricating a False Story Passos fabricated a false story claiming that Berkshire Hathaway Inc., a well-known U.S. investment holding company, had recently made a substantial investment in IRB. This was intended to create a false sense of security and value.
- Creating Fake Documents To support the fabricated story, Passos created and shared false documents, including a shareholder list that purportedly showed Berkshire Hathaway had made significant purchases of IRB stock. These documents were then provided to the media.
- Disseminating to Media Passos actively planted this false story with the media. Following the close of trading on February 26, 2020, the media reported the false news about Berkshire's purported investment in IRB.
- Misleading Investors and Analysts In addition to the media dissemination, Passos made false and misleading statements directly to at least four investors and one securities analyst concerning Berkshire's supposed substantial investment in IRB.
- Initial Stock Price Reaction As a result of the media reports on the false Berkshire news, IRB's stock price rose by more than 6% in the trading session following the announcement.
- Berkshire's Denial Berkshire Hathaway publicly denied that it had ever invested, or intended to invest, in IRB. This public denial directly contradicted the false story Passos had disseminated.
- Stock Price Collapse Following Berkshire's denial, IRB's stock price experienced a severe decline, dropping by more than 40% over the next two trading sessions, causing significant losses for investors who had acted on the false information.
The Enforcement Action
The SEC obtained a final consent judgment against Fernando Passos, former executive vice president of finance and investor relations of IRB Brasil Resseguros S.A. Passos was charged with planting a false story with the media and disseminating false documents claiming Berkshire Hathaway had invested in IRB. Without admitting or denying the allegations, Passos consented to a permanent injunction against violating antifraud provisions, a bar from serving as an officer or director of a public company, and a $500,000 civil penalty. The final judgment was entered on February 25, 2026.
Named in this action: Fernando Passos.