© Reuters. FILE PHOTO: People exit the headquarters of the U.S. Securities and Exchange Commission (SEC) in Washington, D.C., U.S., May 12, 2021. REUTERS/Andrew Kelly/File Photo
NEW YORK (Reuters) -The U.S. Securities and Exchange Commission on Monday charged a former senior executive at IRB Brasil Resseguros SA with planting a false story that Warren Buffett’s Berkshire Hathaway (NYSE:) Inc had made a significant investment in the Brazilian reinsurer.
Fernando Passos, who had been IRB’s executive vice president of finance and investor relations, allegedly planted the story in February and March 2020 to prop up IRB’s stock price, which had fallen significantly after a short seller questioned the company’s financial results.
Passos, of Sao Paulo, was accused of fabricating false documents concerning Berkshire’s nonexistent investment and caused IRB to make false and misleading statements directly to investors and at least one analyst.
The SEC said IRB shares rose 6% after the false Berkshire news became public on Feb. 26, 2020, but sank more than 40% over two days after Berkshire said on March 3, 2020 it never was and had no intention of becoming a shareholder.
Passos could not immediately be reached for comment. Berkshire and IRB did not immediately respond to requests for comment.
The SEC filed its civil complaint in federal court in Manhattan.
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