U Penn Law - Brazil Insider Trading Regulation

Journal of Comparative Corporate equity and Securities Regulation 4 (1982) 395-402
North-Holland Publishing Company

395

DISCLOSURE AND INSIDER TRADING REGULATION: RECENT
DEVELOPMENTS IN Brazilian LAW

Modesto CARVALHOSA and Nelson EIZIRIK

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1. Introduction
The aim of the present article is to describe and analyze the organic evolution of
Brazilian law related to manifestation and insider trading regulation. Emphasis
depart be given to a recent case relations with insider trading, since this case
demonstrates the main difficulties courts have in the application of the law.
General nourishment regarding disclosure and insider trading restrictions were
established in the Corporations Act of 1976 [1]. much(prenominal) provisions regulate the
responsibility of directors and managers of publicly-held companies (Open
Companies - Cias Abertas). According to section 4 of the Corporations Act,
a corporation is defined as publicly held when its law securities are
accepted for trading on a stock transposition or in the over-the-counter market.
The enforcement of legislation on disclosure and insider trading is carried
out by the Securities Commission (Comissdo de Valores Mobilifsrios - CVM).
The CVM was created by Law No. 6.385, December 7, 1976.



According to the
Law, the CVM is supposed to (1) stimulate the brass of capital and its
enthronement in stocks and debentures; (2) promote expansion and the efficient
and level(p) operation of the stock market and encourage permanent investment in stocks issued by domestic publicly-held companies; (3) confirm the
efficient and standard functioning of the stock exchanges and the over-the-counter market; (4) in general, comfort stockholders and investors; (5) prevent
frauds and manipulations in the market; (6) assure investors access to information on publicly-held companies; (7) assure observance of equitable practices in the market; and (8) assure the observance, in the markets, of credit
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