Brazil’s Top Investment Banker Busted; BTG Pactual Chief in Bribe Probe

andre esteves

Andre Esteves, Brazil’s top billionaire investment banker and until this past Sunday, Chairman and CEO of brokerdealer Grupo BTG Pactual SA, submitted his resignation this weekend after being busted last week by federal prosecutors for purported bribery charges.

47 year old Esteves  is not only Brazil’s top investment banker, he is one of the top ‘cool kids’ across the global investment banking industry. Esteves, who many have likened to being Brazil’s version of Lloyd Blankfein, is also the controlling shareholder of Brazil’s equivalent of Goldman Sachs. The finance industry star delivered his resignation from a Sao Paulo jail cell, where he is being held without bail consequent to his arrest on purported bribery charges relating to a probe of Petrobas aka Petróleo Brasileiro SA, Brazil’s largest state-controlled energy company. Though expected to have been released this weekend, the Supreme Court of Brazil ruled to make the arrest “preventative”—which in layman terms means that Esteves will be cooling his Gucci-covered heels for an indefinite period.

Prosecutors suspect the billionaire dealmaker, along with a senior senator, tried to obstruct a long-running graft probe involving Petrobras. Esteves, through his lawyer, has denied the allegations. Shares and bonds in Latin America’s largest independent investment bank were bashed further on Monday, reflecting concerns about the impact of the investigation on operations after the Supreme Court extended the financier’s detention indefinitely.

It was the first time the bank, which has long been synonymous with Esteves, has been directly implicated in the bribery scandal. Prosecutor General Rodrigo Janot used evidence and other suspects’ testimony to persuade the country’s Supreme Court to extend Esteves’ detention on a preventive basis.

Documents obtained by Brazil prosecutors purportedly suggest BTG Pactual had paid 45 million reais ($12 million) to Eduardo Cunha, speaker of the lower house of Congress, in exchange for passing legislation favoring the bank, the newspapers said.

BTG Pactual denied making such payments in a statement on Sunday, and pledged to cooperate with authorities. Cunha also denied the allegations.

BTG Pactual named two founding partners, Chief Operating Officer Roberto Saloutti and Chief Financial Officer Marcelo Kalim, as co-CEOs. Persio Arida, who became acting CEO after Esteves’ arrest, is now chairman, with Huw Jenkins, head of the bank’s international arm, becoming vice chairman.

The full article from Reuters is at this link

China Regulators Ban Derivatives For Financing Stock Purchase

securities association of china

(Bloomberg) — The Securities Association of China will ban brokerages from offering financing for stock market trading using derivatives, the country’s securities regulator said.

Brokerages should provide funding to their clients using margin trading tools that comply with the rules, China Securities Regulatory Commission spokesman Zhang Xiaojun said Friday at a briefing. Swaps offered by some brokerages have deviated from their role as a risk management tool, instead becoming a way to offer unofficial margin loans for investors, Zhang said.

China’s regulators are attempting to prevent another build up of leverage in the stock market similar to the borrowing binge that took place earlier this year and helped propel the boom and then bust in Chinese share prices. Earlier this month, the country’s two mainland stock exchanges doubled margin requirements to 100 percent in another move to limit leverage in the market.

“After the stock market rout, regulators have a new understanding about leverage,” Chen Xingyu, a Shanghai-based analyst at Phillip Securities Research, said by phone. “Their measures have been focusing on deleveraging and reducing risk and this policy stance should continue. The regulators will be more conservative and prudent than before.”

Zhang was confirming a report Thursday in Caixin magazine, which said China’s brokerages were told to wind down the business of offering total return swaps, a type of over-the- counter derivative, for clients who want to trade stocks.

At the end of October, the over-the-counter derivative businesses of 39 brokerages had an outstanding nominal value of 279 billion yuan ($43.7 billion), according to data from the Securities Association of China. Of that, swaps accounted for 44 percent by value, while options contracts accounted for the rest.

The amounts involved in the swaps compare to China’s official margin finance balance of more than 1.2 trillion yuan.

The total return swaps can offer three to five times leverage because the investor pays only a deposit to the broker and then a fixed-interest payment at the end of the contract, in return for receiving a floating return on the stocks.

BrokerDealers For Sale-Glut Makes Buyers Market

brokerdealer for sale

A glut of independent brokerdealers (IBDs) for sale is creating a buyer’s market, putting pressure on prices across the independent broker-dealer space.

While no “Black Friday Sale” signs are expected to appear (that’s right, Black Friday is a negative in the world of Wall Street), according to coverage from, coupled with a further investigation by the curators at, prices for IBDs are going lower, not higher; creating opportunities for new entrants and headaches for rumored sellers that include Cetera Financial Group.

( November 25 A glut of independent broker-dealer firms (IBDs) for sale is creating a buyer’s market for independent broker-dealers that could put pressure on the prices sellers are able to attract.

Firms for sale include Cetera Financial Group, AIG Adviser Group and Next Financial Group, which collectively represent 15 individual broker-dealers and more than 15,000 registered representatives and advisers. maintains the world’s largest directory of broker-dealers in more than three dozen countries and a robust database of those interested in buying or selling broker-dealers

“There is a higher number of potential opportunities than we have ever seen before,” said Richard Lampen, president and chief executive of Ladenburg Thalmann Financial Services, which has completed five broker-dealer acquisitions since 2007. “The $64,000 question is, how many deals are going to get done?”

“With so many potential sellers in the market, and rumors of more sellers, I’m curious to see how the market-clearing process will work,” Mr. Lampen said. “There are some willing buyers, but is there a price that’s going to work?”

Mr. Lampen said sellers are going to have a reality check when it comes to offers their properties are likely to attract. He said the industry has put behind it the outsized valuations of independent broker-dealers used in acquisitions by RCS Capital Corp., a brokerage holding company that one-time real estate mogul Nicholas Schorsch put together in a flurry of acquisitions between 2013 and 2014.

“Some sellers still think it’s 2014, and Nick Schorsch price expectations are out there,” Mr. Lampen said. “But it’s hard to imagine any one overpaying at this stage in the process.”


The largest of the firms reportedly in play is Cetera Financial Group, the network that Mr. Schorsch put together. It is made up of 10 broker-dealers with about 9,500 reps and advisers. Larry Roth, the CEO of Cetera and its parent company, RCS Capital, told advisers on a conference call recently that a half dozen companies had shown interest in the firm and that a new owner or significant private-equity investor would be in place by year-end.

The full story from is here

Re-Branding Asia-Pacific Exchange Now Sydney Stock Exchange

sydney stock exchange

(Traders Magazine)-The Asia Pacific Stock Exchange (APX) is changing its name to Sydney Stock Exchange.

As first reported in Automated Trader, the new Sydney Stock Exchange’s Deputy Chairman George Wang said, “We aim to build the Sydney Stock Exchange as a bridge between Australia and Asia’s capital markets, corporates and investors. provides a global database of broker-dealers in more than thirty countries worldwide

He added that the new name reflects both the role of Sydney as a major financial center in Australia and the Asia Pacific region and the geographic home of the exchange. It also revives and reminds of the rich heritage of the old Sydney Stock Exchange, which was an important trading place in its own right until 1987.

Sydney Stock Exchange will be a member of Asia Pacific Exchange Group (APX Group), as well as Asia Pacific Finance Institute of Australia, and the Asia Pacific Equity Exchange.

BrokerDealer Leading Crowdfund Bandwagon

crowdfund brokerdealer

As the crowdfund movement picks up more steam thanks to the recent update from the US Securities and Exchange Commission, the broker-dealer community is paying close attention to what could be a big pay day.  One BrokerDealer leading the crowdfund bandwagon is Seed Equity Ventures, led by finance industry veteran Todd Crosland.

In a recent profile, CEO Crosland talks about his broker dealer, which is already operating and doing crowdfunding type equity raises under the SEC’s Regulation D 506(c) rules for general solicitations, says, “ I believe the SEC passing Title III will be a watershed event for both startups and investors. Startups and the general investing public will be forever changed.” is the global directory of broker-dealers; the firm’s database covers brokerdealers operating in more than 30 countries across the free world.

Seed Equity Ventures is a registered broker dealer with the U.S. Securities and Exchange Commission and is a member of both FINRA and SIPC. Seed Equity Ventures provides investment banking services to startups and growth companies from around the world.

The Forbes piece by Devin Thorpe was excerpted by the curators at crowdfund industry search portal,; here’s the link