Post by account_disabled on Mar 7, 2024 4:24:20 GMT -6
The mayor of Itapuí, in São Paulo, thought about investing public money in the stock exchange. In order to increase and diversify the municipality's revenues, José Gilberto Saggioro sent a letter of consultation to the city's Secretary of Legal Affairs, Rafael de Almeida Ribeiro, to find out if he can invest the municipality's resources in the financial market, if the municipalities can apply own funds on the stock exchange and what are the legal consequences of this type of movement.
The answers came on Tuesday (/), in a legal opinion signed by Secretary Ribeiro. According to him, the investment of municipal resources on the stock exchange can only be done if a law is enacted that regulates it. The secretary explains that, just like public administration, members of the Executive can only do what the law allows. What the legislation does not provide for is prohibited.
Regarding the legal consequences, Rafael Ribeiro made serious BTC Number Data reservations. He said that the mayor is subject to being accused of crimes set out in the Administrative Improbity Law, the Fiscal Responsibility Law and Decree-Law /, which is of a criminal nature. The danger of these accusations, he explains, is that, as in article of the Improbity Law, it is not necessary to prove intent, only the existence of guilt.
These possible accusations, according to Itapuí's Legal Affairs Secretary, could be applied to the mayor given the high risk of investments in the financial market. According to him, experts defend long-term investments in stock exchanges, precisely because of the liquidity and high variation in values. Applying for the stock market, according to Ribeiro, would require a minimum of two years of planning.
But he remembers that, according to the Federal Constitution, municipalities have financial, administrative and legislative independence, and it would be up to city halls alone to decide whether to invest the money in the stock market or not. As for local authorities and mixed-capital companies, Ribeiro points out that, by law, they are governed by the same legal and tax principles as private companies — and can, therefore, apply them to the capital market.
Divergent solutions
As an argument in favor of investment, Rafael Ribeiro points out the need for municipalities to find new forms of resources, as they lost a lot with the reduction in inflationary rates brought by the Real Plan in He also mentions the large amount of court orders, which, especially in São Paulo, compromises a large part of municipal revenues.
The answers came on Tuesday (/), in a legal opinion signed by Secretary Ribeiro. According to him, the investment of municipal resources on the stock exchange can only be done if a law is enacted that regulates it. The secretary explains that, just like public administration, members of the Executive can only do what the law allows. What the legislation does not provide for is prohibited.
Regarding the legal consequences, Rafael Ribeiro made serious BTC Number Data reservations. He said that the mayor is subject to being accused of crimes set out in the Administrative Improbity Law, the Fiscal Responsibility Law and Decree-Law /, which is of a criminal nature. The danger of these accusations, he explains, is that, as in article of the Improbity Law, it is not necessary to prove intent, only the existence of guilt.
These possible accusations, according to Itapuí's Legal Affairs Secretary, could be applied to the mayor given the high risk of investments in the financial market. According to him, experts defend long-term investments in stock exchanges, precisely because of the liquidity and high variation in values. Applying for the stock market, according to Ribeiro, would require a minimum of two years of planning.
But he remembers that, according to the Federal Constitution, municipalities have financial, administrative and legislative independence, and it would be up to city halls alone to decide whether to invest the money in the stock market or not. As for local authorities and mixed-capital companies, Ribeiro points out that, by law, they are governed by the same legal and tax principles as private companies — and can, therefore, apply them to the capital market.
Divergent solutions
As an argument in favor of investment, Rafael Ribeiro points out the need for municipalities to find new forms of resources, as they lost a lot with the reduction in inflationary rates brought by the Real Plan in He also mentions the large amount of court orders, which, especially in São Paulo, compromises a large part of municipal revenues.
