CVM achieves majority to acquit Batista brothers for market manipulation, but postpones trials

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The Securities and Exchange Commission (CVM) postponed this Monday (29) the trial of three lawsuits against the brothers Joesley and Wesley Batista, from the controlling family of JBS (JBSS3), for alleged market manipulation due to the award agreement made by the executives, within the framework of Operation Lava Jato.

The duo already obtained a majority for the acquittal of the accusations. Despite the favorable score for the executives and a possible fine of R$ 500,000 for J&F, the director Flávia Perlingeiro asked for opinions on the three processes of the day and the conclusion of the trial has not yet been set.

In the first case, the Batista brothers and the J&F holding company were accused of insider trading with JBS shares. The reason dates back to May 17, 2017, when the columnist Lauro Jardim revealed that Joesley would have denounced the then president Michel Temer (MDB). EITHER The next day was known on the Exchange as “Joesley Day.”marked by the biggest drop in the Ibovespa since the 2008 crisis and the biggest rise in the dollar in 14 years.

The indictment claimed that Joesley and Wesley knew their accusation could influence the refrigerator’s stock listings and would have authorized J&F’s sale of the shares prior to the cancellation. On the other hand, JBS was in the process of having a share buyback program, which would allow it to buy more affordable shares, according to the prosecution.

The prosecutor’s office also pointed out that there would be an undue gain of R$ 72.9 million by the controllers for the sale of more than 36 million JBS shares held by the Batista holding.

However, the rapporteur Otto Lobo, the directors Alexandre Rangel, João Accioly and the president of the CVM, João Pedro do Nascimento, accepted the arguments of the defense that it would not be possible to foresee the effects of a possible leak of information from the accusation

Most of the directors accepted the explanation that there was a financial need for J&F to pay off its debts and that trading in the shares would be necessary.

On the other hand, the JBS board had already approved the share buyback program weeks before the Batista brothers first contacted the Attorney General’s Office (PGR) to start negotiations for the accusation.

Three directors voted for a R$500,000 fine for J&F for not meeting the legal deadline to trade the shares, while João Accioly voted for the holding company’s acquittal.

operations with interest

In the second lawsuit of the day, in which Joesley Batista, J&F, and Emerson Loureiro, then head of the trading desk at Banco Original, the family’s financial institution, were accused of alleged profits in the interest futures market. due to the volatility caused by the complaint. In the prosecutor’s calculations, the profit would have been R$ 52 million.

But Lobo, Rangel, Accioly and Nascimento understood that it would not be possible to predict what effect a possible leak of the accusation would have on the financial market, since there was already speculation that the Batista brothers would sign a collaboration agreement with the PGR. before the news published by Laura Jardim.

Nascimento highlighted that, although there was an asymmetry of information on the part of Joesley, Loureiro would not have made any atypical transactions in relation to the average of what the Original table operated and in relation to its competitors.

Otto Lobo pointed out that the bank would not have used the full limit of daily resources for operations either, giving another indication that the institution would not have worked with privileged information.

dollar operation

Finally, the last lawsuit dealt with the effects of the leaking of the winning operation in the foreign exchange market, particularly the exchange protection operations, the so-called hedges, of the companies JBS, Seara and Eldorado, J&F.

In this case, Wesley Batista was the executive charged with ordering an Eldorado executive to establish currency protection before the news broke. According to calculations by the CVM technical area, the alleged imbalance would have generated a potential gain of more than R$ 520 million.

In the voting, the president of the CVM, João Pedro do Nascimento, declared himself unable to vote and did not vote. The rapporteur Otto Lobo and the directors Alexandre Rangel and João Accioly accepted the arguments of the defense that the exchange positions were not readjusted in the controversial negotiation session, respecting the expiration of the contracts, which would dismantle the thesis of financial gain with information.

Another point is that the transactions would not have been atypical nor would they have escaped the group’s financial coverage policies, in force since 2008. Following the line of other lawsuits, the conclusion of the CVM executives is that the effect of the leak of the The complaint was unpredictable and that Joesley and Wesley would have no way of knowing when the accusation would be ratified by the Federal Supreme Court (STF) or how the news would reach the press.

Remember how “Joesley Day” was, in the podcast “Os Pregões que Faseram História”

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