Public Traded Companies in Foreign Markets, Investigated for Corruption in Brazil, Can Be Sued in These Jurisdictions by Investors

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Since March of 2014, when Brazilian authorities uncovered “Operation Carwash”, dozens of executives and companies have been investigated and found guilty in Brazil, including Brazilian companies with American Depositary Receipts (ADRs) traded in the New York Stock Exchange or Over-the-Counter (OTC) markets in the United States and foreign companies publicly traded in other jurisdictions.

Companies that are involved in Operation Carwash (and other operations related to corruption schemes in Brazil) listed in Stock Exchanges outside of Brazil, shall follow these jurisdictions’ laws and regulations. Hence, in case of violation, the companies are subject to criminal charges and indemnification suits by damaged investors.