LarrainVial Activos Wins Legal Case Against CMF Sanctions
Chilean Court Reopens Evidence Window in Factop Case,LarrainVial Activos Seeks to Prove Regulator Awareness
Santiago,Chile – A Chilean Court of Appeals has ordered a seven-day reopening of the evidentiary phase in the case surrounding the “Structured Capital I” investment fund,part of the larger “Factop Case.” The decision favors LarrainVial Activos, the fund’s manager, and its former directors, who were previously sanctioned by the Financial Market Commission (CMF). The move allows LarrainVial to present new evidence and call witnesses in an attempt to demonstrate that the CMF was aware of irregularities at STF Capital as early as 2022.This development could substantially impact the penalties levied against the firm and its leadership.
The core of the dispute centers around allegations that the CMF failed in its supervisory duties, allowing the fund to operate despite existing irregularities at STF Capital. LarrainVial argues that the fund’s existence was “possible only as the CMF failed to comply with its legal mandate of supervision and prevention.” The CMF previously fined LarrainVial Activos UF 50,000 (approximately $1.8 million USD as of November 8, 2023) and imposed individual fines on its former directors.
Financial Penalties Levied by the CMF:
| Individual/Entity | Fine (UF) | Approximate USD Equivalent (Nov 8, 2023) |
|---|---|---|
| LarrainVial Activos | 50,000 | $1,800,000 |
| Andrés Bulnes (Former Director) | 4,000 | $144,000 |
| Jaime Oliveira (Former Director) | 4,000 | $144,000 |
| Andrea Larraín (former Director) | 4,000 | $144,000 |
| Sebastián Cereceda (Former Director) | 4,000 | $144,000 |
| José Correa (Former Director) | 4,000 | $144,000 |
| Claudio Yáñez (former General Manager) | 12,000 | $432,000 |
Following the court’s decision, LarrainVial Activos has requested the summoning of representatives and former officials from both the CMF and the Santiago Stock Exchange (BCS). The goal is to ascertain whether CMF officials conducted inspections or took any action regarding STF Capital’s financial standing before the approval of the “Structured Capital I” fund.Specifically, they want to know if regulators “omitted to do so” regarding the patrimonial solvency of STF Capital.
– victoriasterling
This court decision represents a significant development in the ongoing Factop Case. LarrainVial’s strategy hinges on shifting blame to the CMF, arguing that the regulator’s inaction enabled the problematic fund. Successfully demonstrating prior knowledge on the part of the CMF could lead to a reduction or even reversal of the penalties imposed on the firm and its executives. The summoning of CMF and BCS officials is a crucial step, and their testimony will