A publicly traded Brazilian reinsurance company agreed to pay $5 million to harmed investors after its former chief financial officer allegedly lied about Berkshire Hathaway investing in the company.

Fernando Passos, the former CFO of IRB Brasil RE, spread the false information in an effort to lure more investors, according to an indictment unsealed in April 2022 and filed in U.S. District Court for the Southern District of Iowa.

The Department of Justice (DOJ) announced Monday the company entered into a non-prosecution agreement (NPA) with the agency regarding the alleged scheme.

Passos began his alleged fraud in February 2020 following a report by an investment company that raised questions about IRB’s financial statements. The investment company announced it had taken a short position against the company’s stock.

After a subsequent drop in IRB’s stock price, Passos circulated false materials that caused other employees, media, and members of the company’s board to spread the word of Berkshire Hathaway’s purported investment, the DOJ said.

After news outlets published the story, Berkshire Hathaway issued a press release stating it never invested in IRB. The company’s stock price fell “precipitously,” the DOJ said.

In the NPA, IRB admitted it engaged in securities fraud, agreed to continue implementing a compliance and ethics program that meets the agreement’s requirements, and report to the DOJ about its compliance progress. The company also agreed to cooperate with the agency’s ongoing investigation into Passos.

Losses to shareholders were “significantly more” than the $5 million in victim compensation, but the company said it wouldn’t be able to pay a larger amount plus a criminal penalty, the DOJ said. The agency said it used a forensic accounting expert to determine an amount IRB could pay without threatening its continued viability.

IRB could not be reached for comment.