Minister Dias Toffoli of the Supreme Court, on Thursday, December 29, 2025, lifted the secrecy on crucial testimonies related to the ongoing Banco Master investigation, marking a significant development in the case. This decision allowed public access to the depositions provided by Daniel Vorcaro, head of Banco Master; Paulo Henrique Costa, former president of BRB (Banco de Brasília); and Ailton de Aquino, Director of Supervision at the Central Bank, all of whom testified before the Federal Police. The oitivas, or hearings, were conducted on December 30, 2025, and are central to understanding a complex financial dispute involving the acquisition of distressed assets, often referred to as non-performing loans, originating from Banco Master.
At the heart of the matter lies a direct confrontation between Vorcaro and Paulo Henrique Costa, where both banking executives offered starkly contradictory accounts. Their conflicting statements primarily concern the true source of “créditos podres” – problematic loans acquired from Banco Master starting in January 2025, leading to intense scrutiny from federal authorities.
These inconsistencies have prompted a deeper examination by the Federal Police, seeking to clarify the nature of these transactions and the degree of transparency maintained by both institutions throughout the acquisition process, which remains a key focus of the ongoing judicial inquiry.
Conflicting accounts of credit portfolios
Daniel Vorcaro asserted that BRB had been thoroughly informed that the contentious credits originated from a third-party entity named Tirreno. He detailed how this arrangement was communicated, suggesting that BRB was aware of the external source of these financial products, thus distancing Banco Master as the direct originator of the underlying assets in question.
Conversely, Paulo Henrique Costa, the former president of Banco de Brasília, maintained his belief that the origin of the values was directly from Banco Master itself. His testimony suggested a different understanding, indicating that BRB proceeded with transactions under the assumption that the financial instruments were primarily generated by Master, directly contradicting Vorcaro’s assertions.
Discrepancies emerge in executive discussions
Vorcaro further elaborated, stating that he had engaged in multiple discussions with Paulo Henrique Costa regarding Banco Master’s intention to launch a new commercialization model. This innovative format would involve the sale of credit portfolios that were originated by third parties, a strategic shift that Vorcaro claimed to have communicated directly to Costa on several occasions.
However, Paulo Henrique Costa presented an alternative perspective, affirming that his consistent understanding had always been that the credit portfolios were initially generated by Banco Master. He believed these portfolios were subsequently sold to various third parties, only to be reacquired by Master and then resold to BRB, suggesting a more complex, circular transaction rather than a direct third-party origination to BRB.
According to Costa, the full extent of these inconsistencies and the precise nature of the transactions only became apparent to him after the operations had already been concluded. This delayed realization underscores the complexity and potential lack of clarity surrounding the initial agreements and subsequent acquisitions of these significant credit assets within the banking ecosystem.
Federal Police concludes intense confrontation
The Federal Police officially concluded the face-to-face confrontation, known as an “acareação,” between Daniel Vorcaro and Paulo Henrique Costa in December 2025. This critical procedure, designed to clarify conflicting testimonies, involved direct questioning where each executive responded to the other’s statements under oath, aiming to resolve discrepancies in their accounts.
Genesis of the Banco Master investigation
The comprehensive investigations into Banco Master commenced in 2024, following a formal requisition by the Federal Public Ministry (MPF). The initial probe aimed to meticulously ascertain allegations surrounding the manufacturing of “insubsistent credit portfolios,” a term referring to financial assets that lack proper backing or are not genuinely viable, posing significant risks to the financial system.
According to the ongoing investigations, these dubious financial titles were purportedly sold to another banking institution. Subsequently, after a thorough fiscalization and audit by the Central Bank, these initial assets were allegedly replaced with other assets that purportedly lacked adequate technical evaluation, further raising concerns about the integrity and transparency of Banco Master’s asset management practices.
Such practices can have profound implications for the stability of the financial market, potentially creating a domino effect where unsupported assets are traded, leading to underestimated risks and eventual losses for institutions and investors. The focus of the inquiry remains on uncovering the full scope of these alleged irregularities and ensuring accountability within the banking sector.
Regulatory intervention and market repercussions
In a decisive move that sent ripples through the financial markets, the Central Bank decreed the extrajudicial liquidation of Banco Master and its associated foreign exchange brokerage on November 18, 2025. This significant regulatory intervention effectively halted the institution’s operations and superseded a planned sale of the bank, which had been publicly announced just the day prior. The liquidation decision was a direct response to the serious findings from the ongoing investigations and a reflection of the Central Bank’s mandate to maintain the stability and integrity of the national financial system. This measure is typically employed when an institution is deemed to be in an irreversible state of financial distress, unable to meet its obligations, or when its practices pose systemic risks. The move ensures that regulatory authorities can take control of assets and liabilities to minimize harm to creditors and the broader economy, preventing further illicit activities or exacerbation of financial vulnerabilities.
Broader implications for financial institutions and oversight
The unfolding scenario surrounding Banco Master and BRB highlights the critical importance of rigorous due diligence processes within the banking sector, especially for transactions involving the transfer and acquisition of complex credit portfolios. Financial institutions are now facing increased pressure to enhance transparency and ensure the verifiable quality of assets they trade.
Regulatory bodies, including the Central Bank, are intensifying their oversight on all aspects of asset quality and operational transparency. This heightened scrutiny serves as a preventive measure, compelling banks to implement more robust internal controls and adhere strictly to prudential guidelines, thereby safeguarding against the recurrence of similar alleged irregularities and protecting the broader financial landscape.
The Supreme Court’s decision to remove the secrecy surrounding these depositions sends a clear message regarding accountability at the highest levels of the financial industry. It underscores a commitment to judicial transparency, asserting that financial dealings, particularly those involving public funds or entities like BRB, must be open to public and legal examination to foster trust and deter misconduct.
This landmark case is anticipated to establish significant precedents for how future investigations into financial irregularities are conducted, influencing not only the management and disclosure of credit portfolios but also setting new standards for corporate governance and ethical practices across the entire banking sector. The outcomes could reshape regulatory expectations and enhance protection for consumers and investors alike.
The role of state-owned banks in credit transactions
BRB, as a state-owned bank, faces particular scrutiny regarding its financial dealings, especially when acquiring assets that may carry elevated risks. Its operations are inherently linked to public trust and the prudent management of resources, making transparency and adherence to strict ethical guidelines paramount.
The involvement of a state-owned entity in such a contentious case underscores the need for exemplary governance within public financial institutions. Any perceived lapse in due diligence or oversight can erode public confidence and necessitate more stringent accountability measures from regulatory bodies and the government itself.
