Police arrest JBS CEO Batista

Wesley Batista, who has been at the helm of JBS since 2011, was detained under an arrest warrant against him and his younger brother, Joesley, for suspected insider trading. The billionaires, both in their mid-40s, control 42% of JBS.

The Batista brothers’ lawyer, Pierpaolo Bottini, called the insider trading allegations and the arrest of the meatpaker’s CEO “unjust, absurd and regrettable.” If convicted, the Batistas may be the first people in Brazil jailed for insider trading.

JBS shares rose 2.4%, erasing early losses, on optimism that Wesley Batista’s arrest will accelerate his ouster as chief executive.

The accusations could hurt a plea deal that both brothers signed in May in relation to a three-year graft probe that has shocked Brazil’s political and business establishment.

The insider trading case involving JBS follows probes by markets watchdog CVM on trades that took place before the plea deal was leaked to the press on May 17. The impact from the leak, which ensnared senior politicians, led to Brazil’s worst financial market selloff in at least a decade.

According to police investigators, the Batistas were aware of the market impact that their plea deal would have on JBS shares and the currency. Police said the brothers created a strategy to protect their JBS holding and help the company amass large foreign-currency positions ahead of the leak.