A Brazilian federal court has ordered to detain José Carlos Xavier de Oliveira, the former CEO of Bank of New York Mellon Corp.'s Brazilian unit, as part of a probe into graft allegations involving the Postalis pension fund, Reuters reported, citing "a source with knowledge of the matter."
Meanwhile, Banco Nacional de Desenvolvimento Econômico e Social's CEO Paulo Rabello de Castro was released after being questioned in federal police headquarters, a court document said.
The federal police on Feb. 1 issued 100 search-and-seizure warrants in connection to the Postalis investigation. Among those investigated were managers at the Postalis fund, executives at a foreign financial institution, listed companies and risk-assessment firms, a police statement said.
BNY Mellon's Brazilian unit managed some of Postalis' assets. Brazilian prosecutors earlier asked the subsidiary to pay Postalis 8.2 billion Brazilian reais due to losses incurred by the pension fund from the management of the assets. The unit failed to both identify investment risks for Postalis and observe asset allocation rules in Brazil, the prosecutors claim.
As of Jan. 1, US$1 was equivalent to 3.17 Brazilian reais.
