In re Banco Bradesco S.A. Securities Litigation

The Court directed the issuance of the Notice to inform potential Settlement Class Members about the proposed Settlement and their options in connection therewith before the Court rules on the proposed Settlement. Additionally, Settlement Class Members have the right to understand how the class action lawsuit may generally affect their legal rights. The Court held its hearing on the fairness of the Settlement and related matters on November 18, 2019 and found the Settlement to be "fair, reasonable, and adequate" pursuant to Rule 23(e). You can view this Order here.

This Action arose out of Operation Zealots, the Brazilian Federal Police’s multi-year investigation into the bribery of Brazilian tax officials, which revealed that, during the relevant time period, Defendants are alleged to have offered to pay millions of dollars in bribes in exchange for billions of dollars in favorable tax rulings and benefits for Banco Bradesco S.A. (“Bradesco” or the “Company”). Specifically, this Action alleged that the Company and three of its senior executives—Bradesco’s Chief Executive Officer, Luiz Carlos Trabuco Cappi, Bradesco’s Managing Officer and Investor Relations Officer, Luiz Carlos Angelotti, and Bradesco’s Executive Vice President during the relevant time period, Domingos Figueiredo de Abreu—issued false and misleading statements and failed to disclose material adverse facts in an attempt to conceal this tax bribery scheme.

The Action was commenced on June 3, 2016, with the filing of a putative securities class action complaint in this Court captioned Bryan v. Banco Bradesco S.A. et. al., Case No. 1:16-cv-04155-GHW. By Order dated August 15, 2016, the Court appointed Public Employees’ Retirement System of Mississippi as lead plaintiff, Kessler Topaz Meltzer & Check, LLP as lead counsel and Labaton Sucharow LLP as liaison counsel.

On October 21, 2016, Lead Plaintiff filed the operative complaint in the Action—the Amended Class Action Complaint (“Amended Complaint”). The Amended Complaint asserted claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 78j(b) and 78t(a), and the rules and regulations promulgated thereunder, including SEC Rule 10b-5 (17 C.F.R. § 240.10b-5), against Bradesco, Trabuco, Angelotti and Abreu.

On December 23, 2016, Bradesco, Trabuco, Angelotti and Abreu moved to dismiss the Amended Complaint (“Motion to Dismiss”). On February 3, 2017, Lead Plaintiff filed its opposition to the Motion to Dismiss, and on March 3, 2017, defendants filed a reply in support of their motion. By Order dated September 29, 2017, the Court granted in part and denied in part Defendants’ Motion to Dismiss the Amended Complaint. Pursuant to its Order, the Court (i) sustained Lead Plaintiff’s claims under § 10(b) of the Exchange Act and Rule 10b-5 thereunder with respect to certain statements made by Bradesco, Trabuco and Angelotti; (ii) sustained Lead Plaintiff’s claims under § 20(a) of the Exchange Act against Trabuco; and (iii) granted the Motion to Dismiss in all other respects, including all claims against Abreu.

Thereafter, the Parties commenced discovery. Defendants filed their answer to the Amended Complaint on January 31, 2018, and filed an amended answer on April 6, 2018.

On August 17, 2018, Lead Plaintiff moved for certification of the class, including appointment of Lead Plaintiff and Boilermaker-Blacksmith National Pension Fund (“Boilermaker-Blacksmith”) as class representatives (“Motion to Certify”). On August 21, 2018, Defendants filed a letter seeking a pre-motion conference regarding Defendants’ proposed motion to strike Lead Plaintiff’s addition of Boilermaker-Blacksmith. Lead Plaintiff filed its response letter on August 27, 2018. On September 14, 2018, pursuant to request of the Court, Lead Plaintiff filed a motion for leave to add Boilermaker-Blacksmith as a proposed class representative (“Motion to Add”).

Defendants opposed Lead Plaintiff’s Motion to Add and Motion to Certify on September 24, 2018 and November 9, 2018, respectively. Lead Plaintiff filed replies in support of its motions on September 28, 2018 and December 14, 2018. Pursuant to leave by the Court, Defendants filed a sur-reply in opposition to the Motion to Certify on February 7, 2019 and Lead Plaintiff filed a sur-sur-reply in support of its motion on March 8, 2019. Defendants filed a response to Lead Plaintiff’s sur-sur-reply on April 5, 2018.

While Lead Plaintiff’s Motion to Add and Motion to Certify were pending, the Parties agreed to discuss a possible resolution of the Action. To facilitate their negotiations, the Parties scheduled a formal mediation with Jed D. Melnick, Esq. of JAMS and The Weinstein Melnick Team for April 15, 2019. In advance of the mediation, the Parties exchanged detailed mediation statements. At the mediation, the Parties reached an agreement-in-principle to resolve the Action for $14.5 million in cash.

On July 1, 2019, the Parties entered into the Stipulation and Agreement of Settlement (“Stipulation”), which sets forth the final terms and conditions of the Settlement. The Stipulation can be viewed here.

On July 24, 2019, the Court preliminarily approved the Settlement, authorized notice to potential Settlement Class Members, and scheduled the Settlement Fairness Hearing to consider whether to grant final approval to the Settlement.

On November 18, 2019, the Court entered a Judgment Approving Class Action Settlement finally approving the Settlement and resolving all claims in the Action. The Court also entered separate Orders approving the Plan of Allocation for the proceeds of the Settlement and awarding Lead Counsel attorneys’ fees and expenses. You can view the Court’s Orders on the Court Documents tab of this website.

Classes are generally used in lawsuits that affect a large number of individuals. A class action consolidates into a single action all of the claims of individuals allegedly harmed by the same conduct or course of conduct in the same period of time, thus removing the need for members of the class to file their own individual lawsuits to separately seek to recover for the harm alleged. Once the class is certified, the Court resolves all issues on behalf of members of the class, except for those class members, if any, who specifically choose to exclude themselves from the class.

Lead Plaintiff’s principal reason for entering into the Settlement is the immediate cash benefit for the Settlement Class without the risk or the delays and costs inherent in further litigation. Moreover, the cash benefit provided under the Settlement must be considered against the risk that a smaller recovery – or indeed no recovery at all – might be achieved after full discovery, contested motions, a trial of the Action, and the likely appeals that would follow a trial. This process could be expected to last several years. Defendants, who deny all allegations of wrongdoing or liability whatsoever, have determined that it is desirable and beneficial to them that the Action be settled in the manner and upon the terms and conditions of the Settlement.

If you are a member of the Settlement Class, you are subject to the Settlement, unless you timely request to be excluded from the Settlement Class. The Settlement Class provisionally certified by the Court for purposes of effectuating the Settlement consists of:

All persons and entities who purchased or otherwise acquired the preferred American Depositary Shares issued by Banco Bradesco S.A. (“Bradesco PADS” or “PADS”) during the period from August 8, 2014 through July 27, 2016, inclusive, and were injured thereby.

Excluded from the Settlement Class are:

1. Defendants;
2. The individual Defendants’ Immediate Family members;
3. Any person who was an officer or director of Banco Bradesco S.A. during the Settlement Class Period;
4. Any firm, trust, corporation, or other entity in which a Defendant has or had a controlling interest;
5. Bradesco’s employee retirement and benefit plan(s) and their participants or beneficiaries, to the extent they made purchases or otherwise acquired PADS through such plan(s); and
6. The legal representatives, affiliates, heirs, successors-in-interest, or assigns of any such excluded person or entity.

Also excluded from the Settlement Class are any persons or entities who or which exclude themselves from the Settlement Class by submitting a request for exclusion that was accepted by the Court. See FAQ 13.

PLEASE READ THE NOTICE CAREFULLY TO DETERMINE WHETHER YOU ARE A SETTLEMENT CLASS MEMBER AND WHETHER YOU WILL BE ENTITLED TO RECEIVE PROCEEDS FROM THE SETTLEMENT.

If you wish to be eligible to participate in the distribution of proceeds from the Settlement, you were required to submit the Claim Form and the required supporting documentation postmarked (if mailed), or online, no later than December 21, 2019.

Yes. You are not a member of the Settlement Class if you did not purchase or otherwise acquire Bradesco PADS during the period from August 8, 2014 through July 27, 2016, inclusive. If you purchased or otherwise acquired Bradesco PADS some other time, or did not purchase or acquire Bradesco PADS at all, you are not included within the Settlement Class.

You are also not a member of the Settlement Class if you are one of the persons or entities that are specifically excluded from the Settlement Class (see FAQ 5).

Subject to Court approval, Lead Plaintiff, on behalf of itself and the Settlement Class, has agreed to settle the Action in exchange for a settlement payment of $14,500,000.00 in cash (“Settlement Amount”) to be deposited into an escrow account. The Net Settlement Fund (i.e., the Settlement Amount plus any interest earned thereon while in escrow (“Settlement Fund”) less: (i) any Taxes and Tax Expenses; (ii) any Notice and Administration Costs; (iii) any Litigation Expenses, including any reimbursement of costs and expenses to Plaintiffs, awarded by the Court; and (iv) any attorneys’ fees awarded by the Court) will be distributed in accordance with the Court-approved Plan of Allocation, which will determine how the Net Settlement Fund shall be allocated among members of the Settlement Class. The proposed Plan of Allocation is at the end of the Notice, available here.

At this time, it is not possible to make any determination as to how much any individual Settlement Class Member may receive from the Settlement.

Your share of the Net Settlement Fund will depend on several factors, including the following: how many Settlement Class Members submitted timely and valid Claim Forms; the total Recognized Claims represented by the valid Claim Forms submitted by Settlement Class Members; your Recognized Claim, based on the number of Bradesco PADS you purchased or otherwise acquired during the Settlement Class Period, how much you paid for your Bradesco PADS, when you purchased or acquired your Bradesco PADS, and, if you sold your Bradesco PADS, when and for how much you sold them.

By following the instructions in the Plan of Allocation, you can calculate your “Recognized Claim” amount. It is unlikely that you will get a payment for your entire Recognized Claim amount. The net Settlement proceeds will be distributed to eligible Settlement Class Members on a pro rata basis based on the relative size of their Recognized Claims. See the Plan of Allocation at the end of the Notice for more information.

A “Recognized Loss Amount” will be calculated as set forth in the Plan of Allocation for each Bradesco PADS purchased or otherwise acquired from August 8, 2014 through July 27, 2016, inclusive. The calculation of a Claimant's Recognized Loss Amount will depend upon several factors, including when their shares of Bradesco PADS were purchased or otherwise acquired during the Settlement Class Period, and in what amounts, and whether those shares were sold, and if sold, when they were sold, and for what amounts.

The Plan of Allocation, is set forth at the end of the Notice, available here.

To be eligible for a payment, you must have submitted a timely and valid Claim Form. Claim Forms must have been postmarked, if mailed, or received online on or before December 21, 2019.

It is not possible at this time to determine when the Settlement proceeds will be distributed to eligible Settlement Class Members.

The Settlement Fairness Hearing occurred on November 13, 2019. Following the hearing, the Court entered the Judgment Approving Class Action Settlement finally approving the Settlement and resolving all claims in the Action. The Court also entered separate Orders approving the Plan of Allocation for the proceeds of the Settlement and awarding Lead Counsel attorneys’ fees and expenses. Please note that there may still be appeals. It is always uncertain whether these appeals can be resolved, and resolving them can take time, perhaps more than a year. It also takes time for all Claim Forms to be fully processed. Please be patient.

If you are a Settlement Class Member and you did not exclude yourself from the Settlement Class, you will be bound by any orders issued by the Court. If the Settlement is approved, the Court will enter a judgment (“Judgment”). The Judgment will dismiss with prejudice the claims against Defendants and will provide that, upon the Effective Date of the Settlement, Lead Plaintiff and each of the other Settlement Class Members, on behalf of themselves, and their respective heirs, executors, administrators, trusts, trustees, estates, beneficiaries, insurers, reinsurers, predecessors, successors, and assigns (and assignees of each of the foregoing) in their capacities as such, shall be deemed to have, and by operation of law and of the Judgment shall have fully, finally and forever compromised, settled, released, resolved, relinquished, waived, and discharged each and every Released Plaintiffs’ Claim (as defined in ¶ 30 of the Notice) against the Defendant Releasees (as defined ¶ 31 of the Notice), and shall forever be barred and enjoined from prosecuting any or all of the Released Plaintiffs’ Claims against any of the Defendant Releasees.

Additional details can be found in the Notice, available here.

On November 18, 2019, the Court entered a Judgment Approving Class Action Settlement finally approving the Settlement and resolving all claims in the Action. You can view the Court’s Orders on the Court Documents tab of this website.

The deadline to request exclusion from the Settlement Class was October 23, 2019. It is no longer possible to request exclusion.

No. Excluding yourself from the Settlement Class is the only option that allows you to be part of any other current or future lawsuit against Defendants or any of the other Defendant Releasees concerning the Released Plaintiffs’ Claims. Please note, however, if you decide to exclude yourself from the Settlement Class, you may be time-barred from asserting the claims covered by the Action by a statute of repose. In addition, Defendants and the other Defendant Releasees will have the right to assert any and all defenses they may have to any claims that you may seek to assert. Remember, the exclusion deadline was October 23, 2019.

No. If you asked to be excluded from the Settlement Class, you will not be eligible to receive any payment from the Net Settlement Fund.

The law firm of Kessler Topaz Meltzer & Check, LLP was appointed to represent all Settlement Class Members. These lawyers are called Lead Counsel. You will not be separately charged for the services of these lawyers. The Court will determine the amount of Lead Counsel’s fees and expenses. Any fees and expenses awarded by the Court will be paid from the Settlement Fund. As a Settlement Class Member, you are represented by Lead Counsel. If you want to be represented by your own lawyer, you may hire one at your own expense. If you choose to hire your own lawyer, such counsel must file a notice of appearance on your behalf. See FAQ 22.

Lead Counsel, on behalf of Plaintiffs’ Counsel, will apply to the Court for an award of attorneys’ fees and payment of Litigation Expenses. Lead Counsel has fee-sharing agreements with Liaison Counsel, Labaton Sucharow LLP, 140 Broadway, New York, NY 10005, and additional counsel Gadow Tyler, PLLC, 511 E. Pearl Street, Jackson, MS 39201, which provide that Lead Counsel will compensate these firms solely from the attorneys’ fees that Lead Counsel receives in this Action in amounts commensurate with those firms’ efforts in the Action, such that this will not increase the fees awarded by the Court.

Lead Counsel’s application for attorneys’ fees will not exceed 25% of the Settlement Fund plus payment of Litigation Expenses not to exceed $1.1 million incurred in connection with the prosecution and resolution of this Action. Lead Counsel’s application for attorneys’ fees and Litigation Expenses, which may include a request for reimbursement of the reasonable costs and expenses incurred by Plaintiffs directly related to their representation of the Settlement Class in accordance with 15 U.S.C. §78u-4(a)(4), in an aggregate amount not to exceed $75,000.00, will be filed by October 9, 2019, and the Court will consider this application at the Settlement Fairness Hearing. A copy of Lead Counsel’s application for fees and expenses will be available for review on this website once it is filed. Any award of attorneys’ fees and payment of Litigation Expenses, including any reimbursement of costs and expenses to Plaintiffs, will be paid from the Settlement Fund prior to allocation and payment to Authorized Claimants.

Settlement Class Members are not personally liable for any such attorneys’ fees or expenses.

On November 18, 2019, the Court entered an Order Awarding Attorneys’ Fees and Expenses. You can view the Court’s Orders on the Court Documents tab of this website.

The deadline to object has passed. Your objection must have been received on or before October 23, 2019.

Objecting is simply telling the Court that you do not like something about the proposed Settlement. You can object only if you stay in the Settlement Class. Excluding yourself is telling the Court that you do not want to be part of the Settlement Class and do not want to seek a payment from the Settlement Fund. If you exclude yourself, you have no basis to object because the case no longer affects you.

The Settlement Fairness Hearing occurred on November 13, 2019. Following the hearing, the Court entered the Judgment Approving Class Action Settlement finally approving the Settlement and resolving all claims in the Action. The Court also entered separate Orders approving the Plan of Allocation for the proceeds of the Settlement and awarding Lead Counsel attorneys’ fees and expenses. You can view the Court’s Orders on the Court Documents tab of this website.

No. You did not have to attend the Settlement Fairness Hearing. The Court considered all submissions, even if a Settlement Class Member did not attend the hearing.

The Settlement Fairness Hearing was held on November 13, 2019.

If you are a member of the Settlement Class and you did not submit a valid Claim Form, you will not be eligible to receive any payment from the Settlement Fund. You will, however, remain a member of the Settlement Class, which means that you give up your right to sue about the claims that are resolved by the Settlement and you will be bound by any judgments or orders entered by the Court in the Action.

This website and the Notice contain only a summary of the terms of the Settlement. For the full terms and conditions of the Settlement, please see the Stipulation, available here.

Copies of any related orders entered by the Court will be posted on the website here. Additionally, more detailed information about the matters involved in this Action can be obtained by accessing the Court docket in this case, for a fee, through the Court’s Public Access to Court Electronic Records (PACER) system at https://ecf.nysd.uscourts.gov/cgi-bin/ShowIndex.pl, or by visiting, during regular office hours, the Office of the Clerk, United States District Court for the Southern District of New York, Daniel Patrick Moynihan U.S. Courthouse, 500 Pearl Street, New York, NY 10007.

The CUSIP for Bradesco PADS during the Settlement Class Period is 059460303. The ticker symbol is BBD.

You will need to include documentation to support each transaction in Bradesco PADS set forth in the Claim Form. Acceptable supporting documentation consists of documents showing the number of Bradesco PADS that were purchased/acquired and/or sold during the Settlement Class Period (i.e., between August 8, 2014 and July 27, 2016, inclusive), as well as the dates, number of PADS, and prices of each such purchase/acquisition and/or sale. Documentation establishing membership in the Settlement Class must consist of copies of brokerage confirmation slips or monthly brokerage account statements, or an authorized statement from the Claimant's broker containing the transactional and holding information found in a broker confirmation slip or account statement. Stock certificates may be used to support the amount of Bradesco PADS held at the beginning or end of the Settlement Class Period, but they are not evidence for when and how much the Bradesco PADS were purchased or acquired.

If you no longer have documentation to support your transactions in Bradesco PADS, you should consult with your broker or financial advisor, who may be able to obtain the documents for you. In the case that you cannot locate your supporting documentation, you can ask your broker to write a letter on letterhead detailing purchases/acquisitions, sales and beginning and ending holdings.

We recommend that you file your Claim to the best of your ability, as accurately as possible. Ultimately, however, you may be required to provide independent supporting documentation to verify your Claim.

If you are submitting documentation online, documents should be clear, readable copies, with a max size 20 MB per document, and in one of the following formats: jpg, jpeg, gif, tif, tiff, doc, docx, xls, xlsx, pdf, zip, txt, mht, rtf, msg, or eml.

Participants in and beneficiaries of any employee retirement and/or benefit plan (“Employee Plan”) should NOT include any information relating to Bradesco PADS purchased/acquired through an Employee Plan in any Claim Form they submit in this Action. They should include ONLY those eligible Bradesco PADS purchased/ acquired during the Settlement Class Period outside of an Employee Plan. Claims based on any Employee Plan(s)’ purchases/acquisitions of eligible Bradesco PADS during the Settlement Class Period may be made by the Employee Plan(s)’ trustees.

Please Note: As set forth in FAQ 5, Bradesco’s employee retirement and benefit plan(s) and their participants or beneficiaries, to the extent they made purchases or otherwise acquired Bradesco PADS through such plan(s) are excluded from the Settlement Class and such persons or entities shall not receive, either directly or indirectly, any payment from the Settlement Fund in connection with such PADS.