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Victims of Sara Goldring ask the Central Bank to file a criminal complaint and question obstacles to information

While the Montevideo Stock Exchange continues its intervention of the stockbroker Custody of Movable Securities (CVM)several victims of the operations of the company directed by Sarah Goldring They demand greater “transparency” from the Central Bank (BCU) and even request that the agency analyze filing a criminal complaint on its own.

In a letter addressed to the BCU, CVM clients represented by the law firm Ramírez y Asociados They asked that they be given “immediate” “permanent and unrestricted” access to “all administrative actions” related to CVM and that “both the stockbroker and the inspector be required” to “present a detailed report and documentation of each of the placements made on behalf of the clients” during the period in which the Goldring company hid the true state of its accounts and its values.

But at the same time, from the law firm They propose that the Central Bank “analyze the origin of promoting the corresponding criminal complaint.” This under the understanding that it has more information to settle if there were possible crimes of fraud or misappropriation, and because of the obligation of public officials to report alleged crimes that become known in the framework of their tasks.

Transparency and reporting

Lawyer Gonzalo Ramírez, who represents some twenty affected clients with his law firm, explained to The Observer that on the one hand “due transparency” is demanded from the Central Bank.

Ramírez pointed out that although he understands that the work of both the comptroller and the control body “is difficult”, today the victims do not know the status of their accounts –even those who still have open operations–, unlike the reported company that does have all the information. “When preparing a defense or advice, there is a part that has all the inputs, and another that does not,” he questioned.

In that sense, pointed out that by not “transparenting” all the information to the victims, the bank “is hindering the right” of investors to “know what happened to their money”.

In the petition filed with the BCU, the clients sponsored by the Ramírez y Asociados law firm indicate that they welcome CVM’s intervention but argue that “Now is the time for transparency”. “Both the Stock Exchange (appointed controller) and the BCU itself must guarantee investors the greatest information and transparency about everything that happened so that they can adopt the decisions and actions they deem appropriate (possible negotiations of agreements or promotion of shares). corresponding judicial and/or administrative)”, states the text.

On the other hand, regarding the request that the BCU make the criminal complaint, Ramírez said that when a possible crime is suspected, public officials are obliged to file a complaint.

“In the resolution by which the intervention was decreed, the BCU indicates that there was concealment of information for a prolonged period. We propose that it is in order for the bank itself to analyze the relevance of making the complaint“, he claimed.

The BCU resolution stated that CVM “did not act with due professionalism, care and diligence when carrying out its securities brokerage activities, hiding very relevant information from its clients and providing erroneous information about their positions in the account statements”.

According to the brief presented by the victims, “The guilty or negligent omission on the part of the stockbroker to keep the client informed about his positions, is a serious breach of the contract”.

“But if the omission of the duty to inform is intentional, either to hide the poor results of the investments, or to prevent the client from modifying the instructions given in the past or revoking the mandate, the conduct becomes malicious,” add the text.

“According to what emerges from the BCU Resolution, everything indicates that said conduct –not correctly reporting the positions of the clients– it was not the result of a calculation error, but the consequence of the deliberate decision to hide from investors the losses that had been taking placethrough the preparation of account statements with untrue (false) information, to which we clients had access”, they maintain.

The letter indicates that it was “a repeated behavior, sustained over time and aimed at deceiving customers” and that “as a result of said deception”, all clients were “prevented from adopting the decisions they considered convenient to protect or redeem their investment”, be it “revoking the mandate, modifying the instructions, withdrawing the money in cash, order that the securities be liquidated and demand a documented and detailed rendering of accounts.” “In return, and based on the deception, CVM kept its business, its clientele, and probably continued to charge fees during that period. The authors of the deception with long experience in stock market management were fully aware that each day that passed (preventing us from revoking the mandate, modifying the instructions or demanding the liquidation of the securities) the profit or loss wings multiplied. If the market recovered, Mrs. Goldring would keep her business and investors would probably not know about the damage. If the opposite happened, which was what actually happened, the losses were maximized. Regardless of the type of instruction that each client had given, CVM was obliged to report periodically in a truthful and clear manner and in no case could it manipulate the information to deceive clients and obtain an unfair economic benefit, increasing the damage of the clients. investors,” they add.

But beyond describing that situation, the letter states that it is the Central Bank that has the most information as for determine whether there are sufficient elements to presume possible crimes such as fraud or even misappropriation. For that reason, they understand that it is the bank that must analyze in this instance the filing of a criminal complaint.

“To the extent that -unlike the BCU- we do not have all the information available to qualify the conduct of those who made that decision in CVM -of incorrectly reporting the positions of the clients- We do not categorically affirm that the crime of fraud provided for in article 347 of the Penal Code has been verified.”, indicates the document filed with the bank.

“Nor can we say that CVM administrators have diverted funds from some clients for the benefit of the company, which could constitute the crime of misappropriation contemplated in article 351 of the Penal Code. However, to the extent that the behaviors described by the BCU in the Resolution of July 5, 2022 could constitute a crime on the part of the administrators and/or other physical media of CVM, it should be especially taken into account that according to article 177 of the Penal Code, public officials (among them those of the BCU), have the legal duty to report the crimes of which they have become aware by reason of their functions and that were committed in their department or whose effects ‘the department experienced particularly ‘” states the text.

​“It is undeniable in light of the aforementioned resolution and the decision adopted to intervene in CVM that if the typical conduct provided for in arts. of the Penal Code mentioned or in some other, It would be up to the BCU to formulate the respective criminal complaint since, in addition to being the supervisory body of CVM’s activity, it was the one who carried out an inspection, instructed the matter, ordered its intervention and has all the factual elements to request it. to the Bank’s Legal Department to report whether there are sufficient elements of conviction that compel BCU officials to file the corresponding criminal complaint“, it adds.

“​The most effective thing that the BCU can do to, in compliance with its powers, protect investors is to urgently analyze what is requested in this document and file the corresponding criminal complaint if the factual and legal prerequisites for it”, concludes the text.

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