Get-rich-quick ad spurs debate on misleading advertising in Brazil

“Hi, my name is Bettina. I’m 22 years old and I have a net worth of one million, forty-two thousand reais.”

For the last few weeks, millions of Brazilians have heard this line, often several times per day. As a pre-roll advertising campaign on YouTube, apparently directed at a massive target audience, tons of people have been confronted by the fresh-faced Bettina Rudolph and many have listened—out of genuine interest or passing curiosity—to her take on how she managed to become worth over BRL 1 million in just three years, beginning with BRL 1,520, using the investment tips from Empiricus Research, the company she now works for.

https://www.youtube.com/watch?v=FTlwS0qLKP8

The indiscretion of the advertisement and Ms. Rudolph’s outlandish boasts quickly led to droves of memes made by Brazil’s notoriously cutting and unforgiving netizens. The case soon became more than a laughing matter, however, with Brazilian Securities Commission (CVM) investigating Empiricus. Against the backdrop of the media frenzy is a debate about misleading advertisement in Brazilian financial markets and its effects on a country that already lacks retail investors and financial education.

Possible, but extremely unlikely

Of course, Ms. Rudolph’s story is not quite as simple as she let on in her YouTube sting. Speaking to newspaper Folha de S. Paulo, the investor conceded that she did not turn BRL 1,520 into BRL 1 million and that her investments were in fact backed up by a BRL 35,000 savings account given by her father. She also increased the amount of money she put in stocks over time.  

Market sources consulted by The Brazilian Report confirm that, theoretically, it is possible to obtain such a return. To achieve this result, one would need to put “all of one’s money in stock options, choose the best ones in each period, and not make any big mistakes. Otherwise, you’ll lose everything.” Again, it is possible, but highly unlikely for someone who lacks experience and is not a professional trader—which conveniently summarizes Empiricus’ target audience.   

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It is true that the Bovespa benchmark stock index had strong returns since 2016, which Ms. Rudolph listed as one of the reasons for her success in a subsequent video released...