R.C.D.C.N., a former member of an important Brazilian law firm, was a visiting attorney employed by Gibson, Dunn & Crutcher in the U.S. In August 2023, the U.S. attorney for the District of Columbia accused him of using his position at the firm to access privileged and confidential client files and using material non-public information regarding the purchase of CTI BioPharma Corp. by Orphan Biovitrum AB, among other deals. He made more than $42,000 in profits in the merger by selling 10,400 shares after the deal was announced.
R.C.D.C.N. played guilty and leaned on recent changes to U.S. Sentencing Guidelines that recommend a lighter sentence for defendants with no criminal records. He was sentenced to two months in prison for unlawfully trading on material, non-public information by the U.S. District Judge Carl J. Nichols. In addition, he was ordered to forfeit $ 42,649.13 and pay a $100 fine.
Now, as widely reported by Brazilian media, he’s under investigation by the Brazilian Securities and Exchange Commission for an unusual trade involving shares and derivatives of the energy company EDP Brasil, in which he made BRL 316,600,000 in profit (roughly $63,000).
He profited 45,7% on his original investment due to an announcement made by EDP Brasil in March 2023 that the company was going private, shortly after the lawyer’s purchase of EDP’s shares and derivatives
The trade was unusual because R.C.D.C.N. supposedly wasn’t used to trade derivatives and was actually a lawyer on leave from a law firm that assisted EDP Brasil in its process of going private, which allegedly gave him access to non-public information regarding EDP’s operation prior to the deal.
Although insider trading and similar illegal actions are a crime in Brazil since 2001, only one case has led to a unappealable conviction since then.