Investors, pension funds and government agencies areaccusing big banks of neglecting investments that went bad in Brazil and areseeking some 9.3 billion Brazilian reais in compensation frombanks that include BNY MellonServicos Financeiros Dtvm SA, Banco Bradesco SA, BTG Pactual Group, Banco Citibank SA, Deutsche Bank AG and Banco Santander (Brasil) SA, O Estado de S. Paulo reported.
Investors allege the banks were negligent in supervisingfunds or were co-responsible for losses, according to the report. At leastseven cases have reached the courts in the last two years.
Banks are also reportedly worried about a federal policeinvestigation, the Greenfieldinquiry, that was launched in September to investigate allegedfraud in the country's four largest state-run pension funds, includingCaixa EconômicaFederal's Funcef and Banco do Brasil S.A.'s Previ.
So far assets worth about 8 billion reais in currentaccounts from individuals and corporations have been frozen over allegations ofcrimes of fund mismanagement. To release its assets, Bradesco recently made adeal with a federal courtoffering guarantees worth up to 104 million reais.
The amount being asked of Bradesco pales compared to the 5billion reais Brazil's postal service pension fund Postalis is seeking from BNYMellon, which had an exclusive service contract with Postalis, the report said.
Postalis is also seeking a recovery of losses from creditfund Silverado, in addition to BTG Pactual, Sul America Investimentos and JPMorgan, who are in turn seeking reimbursement of 400 million reais from thefund's custodians BNY, Deutsche Bank and Santander. Elsewhere, Santander andDeutsche are also being blamed for a loss in the credit fund . Moreover, BTGwas also sued by Chinese family Ban Chun for alleged losses in derivativetransactions, the publication noted.
In a statement, BNY said Postalis' accusations "are notbased on facts."
As of Oct. 3, US$1 wasequivalent to 3.23 Brazilian reais.