Felipe Navarrete, director of Invercap, had information that would drive CAP shares higher on a certain date. He also passed the information on to his sisters, who, while having lunch in Barrio El Golf, ordered their stockbroker to buy their shares.
The Commission for the Financial Market (CMF) reported this Monday that its Council determined to sanction the director of Invercap SA, Felipe Navarretewith a fine of UF 10,000 ($332,910,000) for make purchases of CAP shares using privileged information and communicate that to his sisters.
Thus, Ruth and Anamaría Navarrete were fined UF 2,000 ($66,582,000) respectively, for not inhibiting themselves from the operation and “taking advantage” of the data that their brother Felipe disseminated to them: While they both had lunch in Barrio El Golf, they called their stockbroker and gave him a purchase order.
The aforementioned, in addition, was denounced before the Public Ministry because the facts for which he was sanctioned could be covered by crimes contemplated in the Securities Market Law.
Lunch
According to the CMF, which reported this situation through a statement, Navarrete violated the prohibition of making use of privileged information in the acquisitions of CAP shares that he made on the day December 7, 2020.
The privileged information referred to “the board agreement of Invercap SA, dated December 4, 2020, to launch an operation to acquire 6.77% of CAP shares owned by MC Inversiones Limitada and contracting Banco BCI for preliminary advice on said operation”.
That acquisition would give a greater value to CAPas a result of the greater stability in its administration and consolidation in its control by Invercap SA This, considering that it would have the possibility of electing four of its seven directors, as evaluated by the board of the latter. This had the potential to influence CAP’s share price.
Thus, being in possession of privileged information and having verified that he had carried out an operation with respect to the securities to which said information referred, it was possible to establish that Felipe Navarrete’s purchases “were made in contravention of the prohibition of the use of privileged information referred to in article 165 of the Securities Marking Law”.
The resolution details that on January 4, 2021, the sisters of Felipe, Ruth and Anamaría Navarrete Pérez, They met for lunch at a restaurant in the El Golf neighborhood in Santiago.
While they were meeting, Ruth and Anamaría Navarrete gave the order to buy CAP shares through BCI Corredores de Bolsa.
Finally, the resolution concludes that “Ruth and Anamaría Navarrete instructed the purchases while in possession of privileged informationbecause that day they received privileged information and, therefore, were prevented from acquiring such valuesand should have refrained from the purchase”.
The CMF stressed that the behaviors described are contrary to what is stated in article 165 of Law No. 18,045 of the Securities Market, which prohibits making use of privileged information, operating with the securities to which that information refers, or communicating said information. To thirds.
Article 165 of the Law expressly states that any person who, due to their position, position, activity or relationship with a securities issuer or with the persons indicated in Article 166 of that Law, possesses privileged information, must keep confidential and You may not use it for your own benefit or that of others, nor acquire or dispose of, for yourself or for third parties, directly or through other persons, the securities on which you hold said information.
Adds the prohibition of using privileged information to obtain profits or avoid losses, through any type of operation with the securities to which it refers or with instruments whose profitability is determined by those securities.
Along with this, it prohibits communicating said information to third parties or recommending the acquisition or disposal of said securities, ensuring that this does not occur through subordinates or trusted third parties.