The Federal Regional Court of the 1st Region (TRF-1) overturned the preventive detention of Daniel Vorcaro, owner of Banco Master, replacing it with precautionary measures such as electronic monitoring, passport retention, ban on contact with other defendants, periodic court appearances, and suspension from financial activities. The ruling also extended to other executives arrested in Operation Compliance Zero, which investigates fraudulent management, reckless administration, and organized crime in the issuance of credit securities.

The Court’s Decision

Judge Solange Salgado argued that “new facts” and documents presented by Vorcaro’s defense eliminated the requirements for preventive detention. She emphasized that the alleged crimes did not involve violence or direct threats, and therefore, alternative measures were sufficient. While technically defensible, this reasoning clashes with the scale of financial damage and the systemic risk posed by the Banco Master collapse.

A Critical Look at Brazil’s Justice System

This case highlights a troubling pattern: strict in rhetoric, lenient in practice when dealing with white-collar crimes. By replacing prison with precautionary measures in a scandal of massive social impact, the judiciary reinforces the perception that financial crimes are treated as minor infractions — ignoring the fact that millions of depositors and taxpayers ultimately bear the cost. The same institutions that failed in supervision (Central Bank, CVM, auditors, rating agencies) now appear quick to ease criminal accountability, while compensation for victims remains uncertain.

Economic and Systemic Impacts

• FGC under pressure: The Credit Guarantee Fund faces a multi-billion real deficit, to be covered by other banks and passed on to customers through higher fees and interest rates.
• Interest rate curve: Liquidation of government bonds to honor guarantees may push yields higher and make credit more expensive.
• Trust erosion: The sequence “supervisory failure + judicial leniency” undermines investor and depositor confidence.
• Demonstration effect: Judicial tolerance in complex scandals risks encouraging opportunistic behavior in the financial market.

Questions the Judiciary Must Answer

• Accountability: Who in the supervisory chain (Central Bank, CVM, auditors, rating agencies) failed, and how will they be held responsible?
• Protection of depositors: What is the plan for swift and transparent restitution to affected investors?
• Prevention: What new prudential supervision protocols and stricter suitability rules will be implemented?
• Coordination: Will judicial decisions consider systemic risk and collective damage in future cases?

Conclusion

By easing detention in a case with systemic impact, Brazil’s justice system signals misaligned priorities. Without clear accountability for supervisory failures and effective mechanisms for victim compensation, the message is dangerous: financial crimes can be treated as mere oversights. A justice system that acts swiftly to release — but slowly to repair — is not delivering justice; it is producing legal insecurity with a heavy social cost.

CTA: Want to follow the accountability process and economic effects of the Banco Master case? Discover other articles by Pedro Freitas and keep your critical lens sharp.