XP Inc. (XP) Faces Scrutiny After Short Seller Alleges Company Operates A 'Madoff-like' Ponzi Scheme

Associated Press

10-04-2025

SAN FRANCISCO, April 10, 2025 (GLOBE NEWSWIRE) -- On March 12, 2025, investors in XP Inc. (NASDAQ: XP), who purports to be 'a leading, technology-driven platform and a trusted provider of low-fee financial products and services in Brazil,' saw the price of their shares decline over 5% after a short-seller published a report titled 'XP's (Nasdaq: XP) Entire Profits Are Dependent on What Insiders Call a 'Madoff-Like Ponzi Scheme.''
Prominent investor rights firm Hagens Berman is investigating the allegations and urges investors who purchased XP Inc. shares and suffered substantial losses to submit your losses now. The firm also encourages persons with knowledge that may assist the firm's investigation to contact its attorneys.
844-916-0895
XP Inc. (XP) Investigation:
The investigation is focused on the propriety of XP's statements about its business model and recent assurances to investors that it has improved its internal control over financial reporting.
XP's assurances may have come under question on March 12, 2025, when Grizzly Research published 'XP's (Nasdaq: XP) Entire Profits Are Dependent on What Insiders Call a 'Madoff-Like Ponzi Scheme.' Grizzly alleges, in part, that:
'Our research uncovers that [XP] is running a massive Ponzi scheme facilitated through certain derivatives sales to retail clients, which are funneled through special funds and misrepresented as proprietary trading profits[;]'
'At the center of the scheme is a XP fund called GLADIUS FIM CP IE ('Gladius') that returned over 2,419% over the last five years with unbelievably low volatility[;]'
'The returns from Gladius and its affiliated fund COLISEU FIM CP IE ('Coliseu') are higher than XP's earnings[]' and '[w]ithout Gladius and Coliseu, XP would be unprofitable[;]'
'The secret to Gladius' profitability is a product called COE which stands for Certificado de Operações Estruturadas []' which 'XP pushes aggressively on its Brazilian retail clients[;]
'According to XP's former employees, the scheme only continues to work as long as XP is able to sell more COEs[]' and '[a]s soon as the inflows stop growing the system falls apart and XP could be liable for enormous obligations it cannot meet[;]' and
'Insiders outright called Gladius a 'Madoff-like Ponzi scheme.''
In response to the Grizzly report, the price of XP shares significantly declined.
Reed Kathrein, the Hagens Berman Partner leading the investigation, stated, 'We are investigating whether XP, as Madoff, may have misrepresented its business model to investors.'
If you invested in XP and have substantial losses, or have knowledge that may assist the firm's investigation, submit your losses now »
If you'd like more information and answers to frequently asked questions about the XP investigation, read more »
Whistleblowers: Persons with non-public information regarding XP should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
Contact:
Reed Kathrein, 844-916-0895