Joesley and Wesley Batista, Brazilian businessmen of J&F Investimentos, acquitted of insider trading

The brothers were held in prison for six months in 2017 based on the accusation declared invalid on Monday (29)

SÃO PAULO, May 30, 2023 /PRNewswire/ -- On Monday, the 29th, the CVM—the Brazilian body equivalent to the Securities and Exchange Commission (SEC) —reached a majority verdict to acquit Joesley and Wesley Batista of insider trading, that is, of using privileged information in financial market operations. The Batista brothers are controlling shareholders of J&F Investimentos, Brazil's largest business group, with ownership stakes in JBS (the world's leading food producer), among other companies in Mining, Pulp, Banking, Energy, Payment Services, Personal Care and Home Care.

The claim which has just been denied caused both businessmen to be kept in pretrial detention for six months in 2017 and 2018.

Other executives of the group and companies controlled by the Batistas have also been cleared in three lawsuits that investigated price manipulation, insider trading, violation of fiduciary duty and abuse of power of control. Director Flávia Perlingeiro took the records under advisement and must present the missing vote within 60 days. The other directors voted for the defendants in all three cases.

During the Board vote that led to this conclusion, CVM Director Otto Lobo, the process rapporteur, highlighted that it was adequately demonstrated that the defendants could not have foreseen the approval of their cooperation agreements, let alone the subsequent media leaks and resulting market impacts. Director João Accioly, who concurred with the rapporteur's stance, sharply criticized the prosecutors, dismissing the notion that the executives could have predicted market behavior, or the consequences of their operations, based on a leak they clearly had no knowledge of. Agency President João Pedro do Nascimento and Director Alexandre Rangel also reached the conclusion that Joesley and Wesley Batista were not involved in insider trading.

 The procedure, initiated in 2017, aimed to investigate whether the entrepreneurs had engaged in financial market transactions in anticipation of the potential repercussions of their plea bargain being leaked to the press.

 The majority of the Board, except for the Director who requested to review the case files and has yet to cast her vote, attested that the group companies' exchange operations were legitimate. They also concluded that the sale of JBS shares was solely driven by an urgent need to bolster J&F Investimentos' cash reserves, rather than the alleged anticipation of a price drop following public disclosure of the cooperation agreement. Furthermore, accusations of unfair practices in Banco Original's interest derivative operations were also dismissed.

J&F Investimentos, their holding company, declared that "the CVM vote has rectified the injustice committed against the group its controllers, reaffirming the fairness and legitimacy with which J&F, its executives and controlled companies have always operated in the financial market."

SOURCE J&F Investimentos