XP returns to the spotlight after trying to ban video; what the brokerage says about the case

Three months after facing a wave of accusations of allegedly operating a “financial pyramid” scheme, XP Investimentos is back in the news.

The controversy was reignited after the brokerage firm attempted to prevent the broadcast of a documentary by influencer Daniel Penin, which questions alleged deceptive practices attributed to the company – one of the largest independent brokerage firms in the country, with more than 4.5 million clients. XP denies the accusations (read more below).

The request for judicial suspension of the video, which remained available on YouTube until the publication of this report, generated repercussions and renewed interest in complaints that the company had already been rejecting.

The documentary is based on a report published in March by American consultancy Grizzly Research, which suggests that XP was operating in a model similar to a Ponzi scheme — in which returns paid to old investors come from money from new contributions, and not from real profits.

According to the report, the brokerage firm would support this model through the sale of Structured Operations Certificates (COEs) and the management of two proprietary funds: Gladius and Coliseu. At the time, XP shares fell almost 6% and the brokerage firm released an official statement informing the adoption of “all applicable legal measures” against Grizzly, for spreading “fake news”.

Penin's video, titled “XP Investimentos – O $ do Impossível”, was supposed to be released on June 4. But the screening was suspended shortly after the trailer was released, bringing the issue back to the fore.

Although Grizzly’s report failed to prove the scheme, Penin says his goal was to expose “big issues that were being swept under the rug.” Despite the court ruling, the influencer posted the video on June 14.

"How to turn R$50 thousand into R$175 million?"

In the documentary, Penin, who has 4.7 million followers on social media, adopts a performative tone and asks questions that raise suspicions about the brokerage firm's performance: “How does XP manage to turn R$50,000 into R$175 million in 9 years?” or even: “Why would the XP group be excellent at managing its own money, but is among the worst when it comes to managing other people's money, according to lawsuits?”

The narrative mainly highlights the performance of the Gladius fund, whose profitability would far exceed that of large Brazilian banks, thanks to operations with the RLP (Retail Liquidity Provider) system, a controversial practice that has been the target of regulation in several countries.

Created to improve liquidity and execution of retail orders, RLP began to be regulated by the Securities and Exchange Commission (CVM) and B3 (stock exchange) due to possible conflicts of interest: the brokerage firm can profit more when the client loses.

RLP allows the broker to internally match the purchase and sale orders of retail clients before offering them on the B3 central book. The main benefit is faster execution and reduced price fluctuations, since the orders are filled internally; however, the broker has room to interfere in the operation.

Furthermore, the practice can only be used with the express authorization of the investor — something that, according to Penin, would not have occurred in all cases. The influencer claims that, before the regulation, the RLP would have yielded R$117 million to XP.

To illustrate, the video compares the performance of the Gladius fund to similar funds from banks such as Itaú, Santander and BTG, whose returns varied between 48% and 115% over nine years. In the same period, Gladius would have delivered a return of 34,606%.

“An investment of R$50,000 in this fund would have turned into more than R$17 million,” says Penin. Grizzly had stated that this “impossible” performance raises suspicions: “If the strategy is not fraudulent, why haven’t other giants replicated it?”

COE: controversial product

The documentary also addresses the marketing of COEs (Certificate of Structured Operations), classified by Penin as a “product designed to deceive the customer”.

In practice, it is a product that combines investments and works as a way for the brokerage firm to raise funds from clients, often generating high commissions for the company. Although it offers potential profitability and partial protection, the COE may favor the brokerage firm more than the investor.

According to the influencer, in these operations, sellers receive commissions of up to 5%, while XP's margin would be around 4%, plus 1% in costs — that is, 10% of the invested amount would already be committed before any profitability. In addition, most COEs are not covered by the Credit Guarantee Fund (FGC) and generally offer lower profitability than government bonds.

The documentary suggests that XP classified the cash inflow generated from the sale of COEs as operating profit, artificially inflating the performance of the Gladius fund. Between 2020 and 2024, the brokerage firm would have withdrawn R$27.66 billion from these funds, while its net profit in the period totaled R$17.52 billion.

Influencer cites alleged cases of churning

Penin also highlights alleged cases of churning — a criminal practice that consists of excessive operations in clients' accounts to generate commissions. The video presents reports from investors who claim to have suffered millions in losses.

One of them reportedly lost R$5 million in operations, with brokerage fees that exceeded his assets; a businessman reportedly saw half of the R$10 million he invested evaporate, with R$2.1 million in fees alone; another reported having paid R$20 million in commissions on an equivalent capital; and a client, Márcio Barbeiro, reportedly lost R$31 million.

According to the influencer, XP was sentenced in court in at least one of these cases, but appealed, arguing that the decision “sets a bad precedent for the market”.

Penin claims that in legal proceedings, the brokerage firm often claims that clients are presenting a “false narrative.” And that when confronted with documentary evidence, it attributes responsibility to the advisors, who act as independent agents.

Former employees interviewed for the documentary claim that there is a culture focused on profit at any cost within XP. “Many advisors only look out for their own pockets and this leads to this bad reputation,” says one. Another states that “every client portfolio must have 5% to 10% in COE.”

What XP says: brokerage refutes accusations and reaffirms appeal to the courts

When contacted by Gazeta do Povo , XP sent a note reaffirming that the brokerage model “is one of the most solid and sustainable in the country” and represents “a unique proposal for investors, with one of the lowest leverages on the market and the best efficiency index among the main financial institutions operating in Brazil”.

XP claims that the accusations made against it are false: “The most recent attempt at fake news against XP, on March 12, came disguised as a report full of false and distorted information, signed by a small and unknown analysis house, with dubious credibility and involved in previous controversies”.

Grizzly Research is a New York-based financial analysis firm suspected of acting as a “short seller” — a strategy that involves identifying problems in listed companies, betting on their shares to fall and profiting from the devaluation.

“These houses profit by lowering the prices of shares and bonds of the companies they supposedly analyze. Then, the false information is promoted through profiles on social networks that seek engagement and clicks at any cost, and soon, a litigation industry comes into play,” says XP.

The brokerage says it intends to “react energetically against this fake news, with a whole arsenal of legal measures, as it has done in the past against this same type of false accusation”.

XP also claims that there have already been "similar attacks, including attempts at collective action", and that it has been successful in all decisions in the American courts, without making any agreement.

About the Gladius and Colosseum funds

Regarding the funds mentioned in the documentary, XP clarifies that they are exclusive vehicles of XP Inc.'s treasury, in which the company itself is the sole shareholder.

“They do not raise funds from clients, nor do they depend on the entry of new participants to maintain their operations or compose their net worth and, therefore, their profitability structure cannot be compared with investment funds that are openly distributed on the market”, continues the XP note.

The result of its portfolios, says the brokerage firm, is due to its significant participation in various segments of the financial industry, both for retail investors and corporate and institutional clients.

The brokerage also highlights that the funds have independent administrators and custodians, such as BNY Mellon, and their portfolios are regularly audited by specialized independent auditors, such as PwC, which reviews and certifies the funds' financial statements.

COE: diversification of investment products

Regarding structured operations (COEs), XP says that they represent only 3% of the investments under its custody. “In addition, because they have a comparable price and are in line with other investment assets, their relevance to the company's results is also similar to their representation in custody (approximately 3%)”, says the brokerage.

In 2024, Brazilian financial institutions issued approximately R$40 billion in COEs, and XP participated with R$8.5 billion, 23% of the total.

XP states that, in the last 3 years, approximately 80% of customers who acquired COEs had performance above 100% of the CDI – the average profitability was 111% of the CDI, according to the company.

According to the broker, the costs of COEs are similar to other compatible products on the market and the rates and conditions of the products are presented in accordance with market regulations and in line with the CVM resolution.

“XP continues to transform and innovate the Brazilian financial market day after day, with the mission of offering quality services and products to all customers”, concludes the note.