Brazil watchdog opens new probes into JBS-related insider trading

SAO PAULO (Reuters) - Brazil's securities regulator said it launched four new probes against meatpacker JBS SA JBSS3.SA and other companies controlled by J&F Investimentos on Friday to investigate suspicious trades made before markets were rattled by the revelation of a plea deal by the company's top executives.

Employees are seen during a technical visit of Brazil's Agriculture Minister Blairo Maggi at the Brazilian meatpacker JBS SA in the city of Lapa, Parana state, Brazil, March 21, 2017. REUTERS/Ueslei Marcelino

In a statement late on Friday, CVM said it is investigating “signs of possible insider trading” of foreign exchange futures, derivatives and JBS stock ordered by meatpacker JBS SA, Banco Original SA and FB Participações SA.

A first investigation had been launched on Thursday, the regulator said.

The Batista brothers, Joesley and Wesley, controlling shareholders in JBS, claim President Michel Temer received 15 million reais ($4.6 million) in bribes from the world’s largest meat processor, according to plea-bargain testimony. Temer has denied any wrongdoing and on Thursday refused to resign.

The real fell 8 percent against the U.S. currency on Thursday, sustaining the largest losses since the country devalued its currency in 1999. The real pared losses on Friday, gaining 3 percent against the dollar.

Valor Econômico reported on Friday that companies owned by the Batista brothers bought over $1 billion in U.S. dollar contracts in the local market hours before the plea deal news broke.

JBS said in a statement on Friday any trades made this week were consistent with the company’s strategy of hedging its large dollar-denominated debt. The company said the recent currency swings could have caused more than 1 billion reais in losses.

The regulator is also examining the sale of shares in the company by its controlling shareholders and subsequent acquisitions by the company´s treasury.

Reuters reported on Thursday the controlling shareholders had sold 329 million reais ($101 million) worth of JBS shares in April, after the secret plea deal talks had gotten underway. During the same period, JBS’s treasury, which had not owned shares during the previous year, acquired around 200 million reais in stocks.

($1 = 3.2530 reais)

Reporting by Tatiana Bautzer and Alberto Alerigi Jr.; Writing by Ana Mano and Silvio Cascione; Editing by Christian Plumb and Mary Milliken