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  HOME | Brazil (Click here for more)

Police Arrest CEO of Brazil Meatpacking Giant for Alleged Insider Trading

SAO PAULO – Police arrested on Wednesday the chief executive officer of Brazilian meatpacking giant JBS for alleged insider trading related to a plea deal he reached with prosecutors, officials said.

Wesley Batista was arrested by Federal Police in Sao Paulo three days after his brother – former JBS chairman Joesley Batista, who had been wanted for allegedly violating the terms of that same plea deal – surrendered to authorities.

The CEO of Sao Paulo-based JBS was arrested for allegedly using insider trading to protect the company from the future financial fallout of their revelations against hundreds of politicians, including Brazilian President Michel Temer.

The Batistas accused Temer of receiving bribes from JBS, allegations that led Attorney General Rodrigo Janot in late June to file criminal charges against the unpopular head of state.

Temer’s allies in Brazil’s lower house of Congress, however, voted last month to spare him from facing trial on the corruption charges.

A day before the plea deal was leaked by the press on May 17, the Batista brothers bought up dollars and sold a big chunk of JBS’ shares because they knew their revelations against Temer and other high-ranking politicians would roil financial markets, authorities say.

On May 18, the Sao Paulo Stock Exchange’s benchmark index, the Ibovespa, plunged more than 8 percent and JBS’s shares plummeted 10 percent.

Since then, JBS, in which the Batista family’s investment holding company, J&F Investimentos, has around a 42 percent stake, has been the target of an insider-trading probe by Brazil’s Securities and Exchange Commission (CVM).

Under the terms of the Batistas’ plea deal, they were shielded from prosecution in exchange for fully disclosing an alleged corruption scheme in which they purportedly paid tens of millions of dollars in bribes to nearly 2,000 politicians in exchange for loans and other benefits.

As part of the deal, they provided prosecutors an audio tape in which Temer appears to encourage the continued payment of hush money to a former speaker of the lower house of Congress, Eduardo Cunha, who was convicted of graft earlier this year and sentenced to more than 15 years in prison.

But another recording provided to prosecutors led to Joesley Batista being arrested on Sunday in Sao Paulo and jailed Monday in Brasilia.

In it, a conversation between the former JBS chairman and another company executive who signed the plea deal suggests they omitted evidence during their testimony.

As part of a settlement linked to the plea deal, J&F Investimentos agreed to pay a whopping 10.3-billion-reais ($3.3 billion) fine.


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