On December 20, 2024, the Financial Market Commission (CMF) revoked the authorization for Sartor AGF to exist, arguing that its business model reflects a pattern based on the "use of the funds under its management as financing vehicles for entities related to its directors and majority shareholders." However, the regulator's decision was annulled this Monday.
The Third Chamber of the Supreme Court - composed of Ministers Jean Pierre Matus, Omar Astudillo, Gonzalo Ruz, along with Lawyers Raúl Fuentes and Carlos Urquieta - unanimously decided to uphold the claim filed by Sartor General Fund Administrator and Sartor Investment Advisory, nullifying the regulator's decision.
The ruling states that the CMF "acted illegally by revoking the authorization for Sartor General Fund Administrator to exist without having processed the formal sanctioning procedure required by the nature of the measure adopted, thereby violating the essential guarantees of due administrative process."
Specifically, the Court refers to the fact that the CMF's resolution has "the nature of an administrative sanction, even when the authority formally framed it within its supervisory or police powers."
And, in its view, the measure "was based on the alleged verification of serious infractions and the imputation of a..."
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On December 20, 2024, the Financial Market Commission (CMF) revoked the existence authorization of Sartor AGF, arguing that its business model was based on a pattern involving the "use of funds under its management as financing vehicles for entities related to its directors and majority shareholders." However, the regulator's decision was annulled this Monday. The Third Chamber of the Supreme Court - composed of Ministers Jean Pierre Matus, Omar Astudillo, Gonzalo Ruz, and Lawyers Raúl Fuentes and Carlos Urquieta - unanimously decided to uphold the claim filed by Sartor Administradora General de Fondos and Asesorías e Inversiones Sartor, nullifying the regulator's decision. The ruling states that the CMF "acted illegally by revoking the existence authorization of Sartor Administradora General de Fondos without having processed the formal sanctioning procedure required by the nature of the measure adopted, thereby violating the essential guarantees of due administrative process." Specifically, the Court refers to the fact that the CMF's resolution has "the nature of an administrative sanction, even when the authority formally framed it within its oversight or police powers." In its view, the measure "was based on the alleged verification of serious infractions and the imputation of a manifestly negligent administration, accusations that imply a responsibility judgment. Under such conditions, the decision constitutes a punitive reaction to specific facts, which requires — according to the principles of administrative sanction law — the processing of a formal procedure, with charges, a bilateral hearing, and full exercise of the right to defense, guarantees that were not met in this case." The Third Chamber clarified in the ruling that, following the revocation of the existence authorization, the CMF decided to open a formal administrative sanctioning procedure against the complainant, which resulted in the revocation of the company's existence authorization. "The opening of this sanctioning procedure, culminating in the same measure of revocation of the existence authorization, confirms that the initial decision, in December 2024, was not an administrative police measure but an administrative sanction imposed without the guarantees required by the legal system. This circumstance reinforces the conclusion that the primary measure was adopted outside the proper sanctioning procedure," the ruling states. Furthermore, it held that revocation "can only be adopted in cases of serious infractions and when it can be established that the administration has acted fraudulently or manifestly negligently. All of the above leads to the conclusion that the nature of the revocation does not correspond to or match a provisional or preventive measure." Currently, the AGF is in liquidation, and a large part of the funds are being managed by Toesca. Lawyers pursuing former partners and executives of Sartor claim that the Supreme Court's ruling will have no practical effects and that the current status quo of the AGF's liquidation will be maintained. This is because the highest court annulled the December 20, 2024 resolution but not the subsequent actions of the CMF. "The above, without prejudice to the subsequent actions and procedures initiated by the CMF in the corresponding sanctioning case," the court's ruling states. It is worth recalling that on November 15, 2024, the CMF agreed to suspend contributions to mutual and public investment funds managed by Sartor AGF "due to significant deficiencies detected in its management," and later also decided to suspend redemptions. Meanwhile, Cristóbal Osorio, partner at Osorio Vargas & Abogados, representing Sartor Administradora General de Fondos, and Antonio Rubilar, partner at AZ and representative of Asesorías e Inversiones Sartor S. A, stated that "this unanimous ruling of the Supreme Court confirms that the CMF acted unfairly and illegally, deviating from the minimum standards of due process, while reaffirming the jurisprudence of our highest court in the matter." "This ruling restores public confidence in respecting the guarantees required by the Constitution and Law No. 21,000, setting a clear limit to arbitrariness. The CMF's intervention was hasty and caused serious effects on the funds, resulting in enormous losses for thousands of contributors. It is now necessary to analyze the scope of the ruling and the actions to follow to ensure its effective enforcement," they concluded. It is also worth noting that on November 18, 2025, the regulator sanctioned eight former directors and managers of the administrator with a total of 14.569 billion pesos in fines. The largest fine was imposed on its former president, Pedro Pablo Larraín. The agency accused them of breaches of fiduciary duty by the AGF and of "overlooking norms aimed at preventing conflicts of interest." Currently, the formalization of the Sartor Case is underway, where the Public Prosecutor's Office accuses 11 defendants and is requesting preventive detention for Pedro Pablo Larraín Mery, Carlos Emilio Larraín Mery, Michael Clark Varela, Rodrigo Bustamante García, and Sergio Yáñez Astete. NEWSLETTER Pulso PML Monday to Friday, 12:30 PM The most relevant in markets, companies, and business: timely information, context, and content to make better decisions. By subscribing, you accept the Terms and Conditions and Privacy Policies of La Tercera.