CVM, the Brazilian securities regulator, has rejected a settlement offer on behalf of meat and poultry company JBS and its shareholders in an insider trading case involving two former company executives that remain shareholders.

Fomer JBS Chairman Joesley Batista, and his brother, former JBS CEO Wesley Batista, were arrested in 2017 on suspicion of insider trading, although each of them has since been released. Both allegedly used inside information to avoid financial losses after obtaining that information during the plea bargaining process for a scandal in which they admitted to bribing Brazilian politicians. The brothers, according to a Reuters report, are the largest individual JBS shareholders.

The settlement that was proposed involved an offer from JBS, the Batistas and related companies to pay a BRL184.5 million (US$45.4 million) in six installments, although the settlement was not deemed an admission of guilt.

However, CVM did not feel the settlement was sufficient. It stated that the accused parties may have made a profit in excess of BRL600 million (US$149 million). The regulator also said that the alleged incident “could be the most serious case of improper use of privileged information and price manipulation in the history of Brazil’s securities market.”

Advertisement

Since the initial corruption scandal broke, both brothers stepped down from their roles with the company.

Wesley and Joesley’s father, José Batista Sobrinho, also the founder and namesake of JBS, succeeded Wesley as the CEO of the company.

Joesley was initially replaced as the company’s chairman by Tarek Farahat. Farahat served in that capacity until October 2017, when the JBS board named Jeremiah O’Callaghan as its new chairman. O’Callaghan had spent the previous 10 years as the investor relations officer of JBS.

JBS, according to the WATTAgNet Top Poultry Companies Database, is the largest poultry company in the world, having slaughtered 3.5 billion birds in 2017. The company has 112 poultry processing plants.