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CEO Of Brazil's "Goldman Sachs" Is Arrested

Tyler Durden's picture




 

Several years ago, when Brazil's economy was roaring on the coattails of the Chinese commodity boom, the country's Grupo BTG Pactual was transformed into the largest independent investment bank in Latin America by the golden boy of Brazil's finance - billionaire Andre Esteves.

Alas, over the past year as Brazil's economy imploded, BTG had been grappling with fallout from his firm’s loans and investments in companies linked to the nation’s biggest-ever corruption scandal.

According to an old Bloomberg profile of Esteves, having disrupted an entrenched industry dominated by old-line banking dynasties, traditional banks and foreign lenders, Esteves became a billionaire before turning 40, then joked that his firm would become “better than Goldman”, a play on the company’s name.

It was not meant to be, not because of rising concerns about the bank's financial health but because unlike executives linked to Goldman in every way imaginable, earlier today the CEO of "better than Goldman" was arrested in the corruption probe touching everyone from the country's petrol-producing giant Petrobras, to president Rouseff herself, one which has shaken the country’s political and economic leadership and left the economy reeling in the deepest depression it has suffered in 80 years.

Televised images showed Esteves being escorted by a police officer into the federal police office in Rio de Janeiro. He sported a white button-down shirt, no tie and light stubble on his face as he walked past reporters to an elevator.

Sandra Goncalvez Pires, a partner at law firm Rao & Pires Advogados, said the banker is accompanied by a lawyer at the police station in Rio. She said his defense team is researching the arrest order, which allows for Esteves to be held for as many as five days and can be extended. BTG Pactual said in an e-mailed statement that it is cooperating with the investigation and is willing to explain whatever is necessary to authorities.

 

Nope, sorry, that would never happen to Lloyd Blankfein.

According to Bloomberg, the Supreme Court authorized the warrant to detain the financier on suspicion he and the leader of the government coalition in the Senate, Delcidio Amaral, allegedly tried to interfere in testimony related to a pay-to-play scheme at the state-run oil giant, Petroleo Brasileiro SA, according to a court document. BTG and Petrobras are partners in a troubled oil-rig supplier. Amaral was also arrested, making him the highest-ranking politician so far to be ensnared in the scandal.

Esteves has been involved in various deals with Petrobras over the years, most notably Sete Brasil. BTG teamed up with Petrobras and other partners in 2010 to create the rig-supplier whose former operating chief admitted in plea bargains to crimes of corruption.

The arrest came as a surprise for most Brazil watchers and ushers in a new phase of a massive graft scandal that has "crippled Brazil’s economy and left President Dilma Rousseff fighting for her political survival. The nation’s currency and stocks, which had stabilized in recent weeks after being in a freefall for much of the year, posted the worst drop among major markets Wednesday amid concern the scandal will prolong political gridlock and the longest recession since the Great Depression.

The stock of BTG promptly plunged on the news to the lowest in years, losing a third of its value in seconds after the news, making a mockery of a March 30 analysis by Morgan Stanley which said that “we think the market is significantly underestimating BTG’s earnings recurrence,” with analysts Jorge Kuri and Felipe Salomao adding that “black-box” concerns "one of the key misconceptions that the market has had on the company." Turns our the "black box" concerns were quite warranted.

 

But why would Brazil take such a draconian step as arresting like arresting one of its most prominent bankers? According to Leme Investimentos fixed income manager Paulo Petrassi, this took place because the "CEO believed he was too powerful to be arrested."

Yet another way BTG never quite made it to "better than Goldman" status.

He added that BTG is very active in swaps market, one of biggest players in the mkt, so volume will fall, even more. It will also impact the Brazilian economy even further as Brazil's velocity of money is set to slow down even more now that its largest banks is incapacitated indefinitely.

More details from Bloomberg:

The sweeping investigation into Petrobras -- dubbed “Carwash” by prosecutors after a gas station used to launder money -- has helped make Brazil’s real the world’s worst-performing major currency this year. Brazil’s economy is forecast to shrink more than 3 percent this year, according to a central bank survey of economists.

 

Esteves has been involved in various deals with Petrobras over the years, most notably Sete Brasil. BTG teamed up with Petrobras and other partners in 2010 to create the rig-supplier whose former operating chief admitted in plea bargains to crimes of corruption.

 

New arrests suggest the full impact of Carwash, or Lava Jato in Portuguese, “is still to come,” Joao Augusto de Castro Neves, director of Latin America for political consulting firm Eurasia Group, said in a note to clients Wednesday. “BTG Pactual has exposure to the oil and gas sector, and the arrest of its CEO is the first time the Lava Jato probe raises the earnest prospect of financial contagion.”

Even so, many Brazilians were stunned by the unexpected arrest of the CEO: "The arrest of Mr. Esteves, the most high-profile figure in Brazilian finance, takes the Petrobras probe to a whole new level and shows the depth and breadth of a scandal that’s engulfing Brazil’s political and corporate establishment," said Nicholas Spiro, managing director at Spiro Sovereign Strategy, in London. "The scandal is becoming more debilitating by the day and is severely undermining the prospects for any kind of meaningful economic reform.”

Amaral allegedly tried to convince former Petrobras director Nestor Cervero, who was arrested in January, to not mention him or Esteves in testimony to federal prosecutors, according to a document of the accusations read aloud in Brasilia Wednesday by Judge Teori Zavascki. Cervero’s family would have received 50,000 reais ($13,000) every month in the proposal, and Esteves “would bear the burden of financial aid,” according to the document. The offer also included a promised 4 million-real payment to Cervero’s lawyer.

Eduardo Marzagao, a spokesman for Amaral, said he was “surprised” by the arrest. “It must be a big mistake," he said.

Well, yes, when rich and powerful people are arrested for embezzling billions, it is usually a "big mistake" as it means that someone's palms were not greased enough.

Now compare to the US, where any executives working for the "one and only" original Goldman will never be threatened with the perp walk shown above. Just in case there is any confusion which the banana republic truly is...

 

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Wed, 11/25/2015 - 13:13 | 6838700 venturen
venturen's picture

1st rule don't think you are better than the Vampire Squid!

Wed, 11/25/2015 - 13:51 | 6838954 OldPhart
OldPhart's picture

2nd rule is that the rich and powerful do not get handcuffs and a perp walk.  However, everyone else is not only cuffed and frog-marched, but beat the shit out of prior to display.

Wed, 11/25/2015 - 14:08 | 6839032 BaBaBouy
BaBaBouy's picture

Lyoyd Lyoyd Lyoyd ...

Wed, 11/25/2015 - 15:07 | 6839386 Ignatius
Ignatius's picture

I love these 'feel good' stories.  Goldman CEO arrested?  "Waiter, I think I will have dessert."

Wed, 11/25/2015 - 15:54 | 6839633 turtle
turtle's picture

 I also misread. BTG is NOT "Goldman Sachs"... unfortunately... deceptive headline.

Wed, 11/25/2015 - 16:05 | 6839689 eatthebanksters
eatthebanksters's picture

So when do they indict Hitlery?

Wed, 11/25/2015 - 16:28 | 6839765 The Pope
The Pope's picture

Evidently, he's the only GOY, ever, on the GS payroll. They probably hired him for specifically that purpose (which means he'll receive his worthless fiat compensation on the day of reckoning).

Wed, 11/25/2015 - 14:04 | 6839040 pelican
pelican's picture

So when does the congress vote to invade Brazil?

Wed, 11/25/2015 - 14:09 | 6839078 kralizec
kralizec's picture

Not enough oil, just big butts,,,

(thinking)

Crap, Barry loves big butts.  OK, you nailed it.

Wed, 11/25/2015 - 14:24 | 6839172 SILVERGEDDON
SILVERGEDDON's picture

Would love to see Lloyd Blankfiend run out of town on a rail, tarred and feathered.

Like Boris would say " Oh, look, small bird like Sesame Street only different "

Wed, 11/25/2015 - 14:54 | 6839337 SILVERGEDDON
SILVERGEDDON's picture

He didn't piece off the politicians and the cops with enough protection money.

He gonna have an asshole like a wind tunnel by the time he gets out of prison.

Wed, 11/25/2015 - 15:39 | 6839564 GhostOfDiogenes
GhostOfDiogenes's picture

He will bond out and go corzine.

Or israel.

This guy is protected.

He must have dirt on people.

Wed, 11/25/2015 - 13:16 | 6838716 margincall575
margincall575's picture

one down hundreds more to go.

Wed, 11/25/2015 - 14:37 | 6839246 Glasnost
Glasnost's picture

Yep. How many connections does this have to European/US Banks?

 

Lehman didn't have to be American.

Wed, 11/25/2015 - 14:49 | 6839318 vincent
vincent's picture

Maybe  a deal will include rolling over on some US criminals and their relationships with Petrobras.

Wed, 11/25/2015 - 14:44 | 6839279 wulf
wulf's picture

...

Wed, 11/25/2015 - 13:18 | 6838723 HowardBeale
HowardBeale's picture

If we don't see the perp walks here, the hangings could be just as satisfying.

Wed, 11/25/2015 - 13:19 | 6838726 Herdee
Herdee's picture

The Talibans of Finance.

Wed, 11/25/2015 - 13:40 | 6838862 giovanni_f
giovanni_f's picture

The Al-Quaida of Greed.

Wed, 11/25/2015 - 13:42 | 6838901 Money Boo Boo
Money Boo Boo's picture

The CIA of Fascist Control

Wed, 11/25/2015 - 13:47 | 6838928 giovanni_f
giovanni_f's picture

The Jabhat al-Nusra of moral squalor.

Wed, 11/25/2015 - 13:52 | 6838969 giovanni_f
giovanni_f's picture

The legion of sordidity.

Wed, 11/25/2015 - 13:55 | 6838993 giovanni_f
giovanni_f's picture

The Fiat money brotherhood of Wallstreetstan

Wed, 11/25/2015 - 14:25 | 6839179 SILVERGEDDON
SILVERGEDDON's picture

The Ass of hole, no toilet paper.

Wed, 11/25/2015 - 13:43 | 6838910 giovanni_f
giovanni_f's picture

The Jund Al-Aqsa of avarice.

Wed, 11/25/2015 - 13:19 | 6838727 SillySalesmanQu...
SillySalesmanQuestion's picture

Will never happen here.

Wed, 11/25/2015 - 13:21 | 6838743 abyssinian
abyssinian's picture

How about the GS CEO here? What time will he be arrested? 

Wed, 11/25/2015 - 13:23 | 6838764 KnuckleDragger-X
KnuckleDragger-X's picture

What's the snow report in hell?

Wed, 11/25/2015 - 14:15 | 6839126 KnuckleDragger-X
KnuckleDragger-X's picture

Hell Michigan, kinda redundant isn't it?......

Wed, 11/25/2015 - 15:16 | 6839437 Baa baa
Baa baa's picture

Funny how this contains the veiled notion that economies cannot continue and survive without these guys. Geez...

Wed, 11/25/2015 - 13:21 | 6838747 SpanishGoop
SpanishGoop's picture

"...true banana republics are for."

Sorry US, you can count yourself to that category too.

 

Wed, 11/25/2015 - 13:40 | 6838885 giovanni_f
giovanni_f's picture

Even without bananas, US managed to become a banana republic. Truly exceptional.

Wed, 11/25/2015 - 15:42 | 6839576 GhostOfDiogenes
GhostOfDiogenes's picture

This is without a doubt the most truthful statement one could say on the matter.

We are a truely a bananaless banana republic.

Wed, 11/25/2015 - 13:21 | 6838752 Gracy101
Gracy101's picture

Bankers are wankers for real. Have a beer and sing it!   https://www.youtube.com/watch?v=palZzPWdGh4

Wed, 11/25/2015 - 13:23 | 6838760 22winmag
22winmag's picture

Obviously he didn't steal enough or make big enough payoffs.

Wed, 11/25/2015 - 13:47 | 6838923 Amish Hacker
Amish Hacker's picture

The $13,000 monthly bone he was going to throw the squealer represents 0.0013 % of the stolen billion, so, yeah, maybe he should have thought about upping the payoff.

Wed, 11/25/2015 - 13:24 | 6838766 Ms No
Ms No's picture

These guys are leaving themselves no way out, they either win or they lose everything.  This goes for the entire shit-wagon empire.  It's similar to Cortez sinking his own ships giving his men no choice but to continue to fight.

Wed, 11/25/2015 - 14:55 | 6839343 vincent
vincent's picture

+1 for Shit Wagon Empire....

I've lodged another protest by dumping yet another Big bank that swallowed my local institution.

This is literally the third time in 5 years that said consolidation has taken place

Wed, 11/25/2015 - 13:32 | 6838831 armageddon addahere
armageddon addahere's picture

If the US is more corrupt than Brazil, we're screwed.

Wed, 11/25/2015 - 14:01 | 6839020 PhiBetaZappa
PhiBetaZappa's picture

Corruption in the US is called exceptionalism. 

Wed, 11/25/2015 - 13:38 | 6838875 madbraz
madbraz's picture

Goldman is the law.

Wed, 11/25/2015 - 13:41 | 6838891 frankly scarlet
frankly scarlet's picture

Yes!

Wed, 11/25/2015 - 13:43 | 6838907 ghostzapper
ghostzapper's picture

Some folks' Banksters got cancered.  

Wed, 11/25/2015 - 13:48 | 6838931 Gulag
Gulag's picture

Arrest them and confiscate all their wealth and goods.

Goldman Sucks will breed more and more cockroaches like Estevez and sent them around the world to destroy and decay nations. NWO independent and sovereign nations should arrest and imprison these social parasites maggots and should take away from the banks the power of money creation.

Banks are the reason of all wars, rouge nations and dictatorships and poverty on this planet.

Too big to fail, too big to jail … what an arrogance.

Wed, 11/25/2015 - 14:09 | 6839080 madcows
madcows's picture

Not too big to shoot though.  i think some people will decide it's time for a revolution and take it upon themselves.  remember, 25% think the government is the enemy.  that's 25% that may take it upon themselves to bring justice to the system.

Wed, 11/25/2015 - 15:08 | 6839401 TheDutchDude
TheDutchDude's picture

They can spend their stolen taxpayer dollars untill they are 90 maybe 100 years old? Satisfy yourself with the thought that when they die they will be judged by Someone who has a special place reserved for these moneychangers.

Wed, 11/25/2015 - 13:52 | 6838971 Amish Hacker
Amish Hacker's picture

Charges of corruption are laughable in the current political/economic world. The whole system is so distorted and compromised that what used to be called corruption is now just business as usual. 

Can you even have corruption when you don't have real markets?

Wed, 11/25/2015 - 13:54 | 6838987 PhiBetaZappa
PhiBetaZappa's picture

Remain calm. That large shadow now covering Brazil is just GS repositioning its Death Star.

Wed, 11/25/2015 - 13:55 | 6838992 Pumpkin
Pumpkin's picture

Meh.... I prefer the nail guns.

Wed, 11/25/2015 - 14:09 | 6839063 truthalwayswinsout
truthalwayswinsout's picture

Don't confuse what happened in 2008 with what is going on in Brazil. For all intents and purposes Brazil is about 6-9 months ahead of the US in how its economy is imploding. And it is imploding far worse than 2008.

Those who are being arrested should count their blessings because things are not so bad yet where the people just take them put them against the wall and shoot them or stone them to death.

But never fear, things will get a lot worse.

By the time the wave hits the US there will probably be no trials and we may just simply put them against the wall and shoot. We call this new standard of due process Absolute Guilt. They are absolutely guilty of their crimes and it makes no sense to give that person a traditional trial. Present the evidence establish the absolute guilt and then sentence them.

The fraud that has been perpretrated since the 2008 crisis is orders of magnitude above that of 2008. It has been nothing less than a conspiracy by our elected representatives, our government and the banksters who decided mark to fantasy is not illegal and loaning 100's of trillions at zero percent to help save the system is warranted. The mantra is simple; steal from those who save so that those who run the casino banks can still keep the game going. The banks never even took the hint to clean up their mess with the zero percent money but instead decided to double down everywhere on commodities which as you can see is failing.

Soon the banks will not be able to hide the losses as commodities go lower and lower.  Oil itself will eventually hit $10 per barrel.

There will be no bailouts this time around and if you have your money in a bank you will be paying for the bail in. When your credit cards stop working and you cannot withdraw money from the bank and your company cannot pay you because its money is frozen as well, that is when the violence here will begin.

Perhaps then we will be smart enough to call a new Constitutional Convention and fix the issues with our out of control federal government.

 

Wed, 11/25/2015 - 14:17 | 6839122 WillyGroper
WillyGroper's picture

What no handcuffs & shackles?

Hope his wrists make it.

Hate for him to find out how much that wife really loves him.

Wed, 11/25/2015 - 14:21 | 6839161 Kirk2NCC1701
Wed, 11/25/2015 - 14:35 | 6839220 benb
benb's picture

Hope is when you see tanks surrounding Goldy in Manhatten and U.S. Army troops arresting the domestic enemies...

 

(But of course Goldman controls the upper key elements of the Army which is why there is no end to the wars and looting.)

Wed, 11/25/2015 - 14:35 | 6839234 Raul44
Raul44's picture

And once again, innocent jewish bank must have been unjustly victim of...

/S

Wed, 11/25/2015 - 14:51 | 6839326 SmittyinLA
SmittyinLA's picture

Funny Google BTG + Abengoa

Can't make this shit up

Wed, 11/25/2015 - 14:59 | 6839363 TheDutchDude
TheDutchDude's picture

Brazilians are oppertunist like goldman bankers, whenever they see the chance to stick a knife in your back while taking your wallet they will go for it.

Although operation carwash is functioning, whithin a few years these people are replaced by other greedy bastards and the process begins again. As Ecclesiastes is saying: there is nothing new under the sun.

Thu, 11/26/2015 - 00:44 | 6841350 onmail1
onmail1's picture

The $$$  

666

Cabal scoundrel beast ruling planet earth with prostitute America riding on it.

Eventually the beast will tear apart the prostitute & eat it.

Its already prophesized

Thu, 11/26/2015 - 13:21 | 6842929 morongobill
morongobill's picture

I was expecting to see him being "frogmarched," what happened?

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