XP faces complaints over multimillion-dollar losses and forced liquidations of COEs (Certificates of Deposit).

247 - The Brazilian market for Structured Operation Certificates (COEs) is facing its worst reputational crisis since the product became popular among retail investors. According to report from Brazil Stock GuideRecent complaints against XP Investimentos point to the improper sale of high-risk products to moderate clients, unilateral liquidations, and even leveraged transactions with undisclosed loans. These cases expose a gap between the complexity of the COEs (Certificates of Deposit) and the level of financial knowledge of the clients who acquired them. XP was contacted but did not comment.

Most of the complaints, published on the consumer protection website Reclame Aqui, target XP. They involve COEs (Certificates of Deposit) linked to Ambipar (AMBP3), Braskem (BRKM5), and Casas Bahia (BHIA3). Investors report losses between 80% and 94% after the brokerage unilaterally liquidated their positions. One client from São Leopoldo (RS) reported investing R$ 180 in COEs linked to Ambipar, receiving only R$ 12 back. Another, in Campinas (SP), reported a loss of R$ 267 and classified the transaction as an "offense against public savings," requesting the intervention of the Public Prosecutor's Office.

The most emblematic case involves an investor from São Paulo, with a moderate risk profile, who was advised to invest R$ 100 in a COE (Certificate of Deposit) linked to Ambipar, internally classified as "high risk – level 70". "I trusted them because it was my life savings. Now I'm left with R$ 17.567. Nobody warned me about the real risk," the client wrote in his complaint.

Documents attached to the complaint show that his profile (27 points) did not allow exposure above the 25-point limit, according to XP's own risk system. The bonds, with maturity scheduled for 2031, were terminated early after clauses of knockout to be triggered, returning between 6,88% and 36% of the invested capital.

Financial law experts interviewed by Brazil Stock Guide They claim there is evidence of a breach of adequacy (suitabilityIn other words, products were sold to clients with an incompatible risk tolerance. “When an advisor recommends COEs (Certificates of Deposit) linked to high-risk corporate debt to moderate investors, that is a fiduciary failure,” said a lawyer specializing in financial litigation. “XP failed to communicate the risk adequately and to supervise its own network of advisors.” Read the full story at [link to article]. Brazil Stock Guide.