PETROBRAS FALLS TO 10 YEAR LOWS ON CORRUPTION SCANDAL
Dec 12 2014, 10.50am GMT
A multibillion-dollar corruption scandal in Brazil’s state-owned oil producer Petrobras, brings shares down 34% in one month.
In November the Brazilian federal police commenced raids on Petrobras offices, at which point shares fell 2.4%, adding to the year losses of 30%. Since then, the US Department of Justice opened a criminal investigation, the Securities and Exchange Commission started a civil investigation and issued a subpoena for documents related to the investigation, then yesterday six US law firms began a class-action to represent investors who lost funds on the US stock exchange by trading Petrobras whilst the corruption was taking place.
The scandal hinges on executives from Petrobras stealing more than R$10bn (US$3bn) and funneling it to President Dilma Rousseff's Workers' Party.
To date there have been 2 senior Petrobras executives arrested with additional formal charges against executives in 6 construction companies who are involved in huge infrastructure projects including the building of Olympic stadiums for 2016. It is alleged that they are part of the scandal. There are expectations that the Brazilian government will announce today a plan to guarantee a debt issuance from Petrobras but in the meantime the company’s accounts stay frozen with no access to capital markets.
MT4 chart: Petrobras falls from 11.02 to 7.23 over one month.
Trade stock CFDs on STOCK.com with full training given to all clients
Trading in CFDs involves significant risk to your invested capital
WARNING FOR HIGH RISK INVESTMENTS:
Trading in CFDs is highly speculative; it carries a high risk and is not suitable for all investors. There is a possibility that you may lose part or all of your return on capital and you should therefore not speculate with a capital that you cannot afford to lose. CFDs or any other underlying instruments (Company’s Assets) confer a high degree of risk and can lead to a loss of your invested capital. Please click here to read the full warning on risks incurred.
STOCK.com is a trading name of Leadcapital Markets Ltd, an investment company authorized and regulated by the Cyprus Securities and Exchange Commission (“CySEC”) under license number 227/14. Leadcapital Markets Ltd is located at Treppides Tower, 9 Kafkasou Street, Aglantzia,5th Floor, CY 2112, Nicosia, Cyprus