Brazil securities regulator accuses Marfrig CEO of insider trading

RIO DE JANEIRO, BRAZIL – (REUTERS) Brazilian securities regulator CVM has accused Marcos Molina, the chief executive of Brazilian meatpacker Marfrig Global Foods SA, of the “misuse of privileged information” involving Marfrig shares before a filing in April 2018, according to a document on CVM’s website.

Molina is in talks with the regulator on a potential settlement, according to the document on the CVM website.

The regulator directed Reuters to the page on its website in response to questions about a report in newspaper Valor on Wednesday that the CVM has accused Molina of insider trading over Marfrig’s 2018 acquisition of a majority stake in National Beef announced on April 9, 2018.

The CVM document showed that the alleged insider trading involving Marfrig shares occurred before the April 9 filing. The probe began in March last year, the document showed.

According to the Valor report, CVM found that Molina snapped up shares in Marfrig prior to the April 9, 2018, announcement of a deal with Leucadia National Corp to take a 51% stake in National Beef. Marfrig’s shares rose nearly 20% after the announcement.

In a statement, Marfrig said Molina “fulfilled his fiduciary duties towards Marfrig” by not buying or selling any of the company’s shares between March 6, 2018, and April 9, 2018, adding that “there was no irregular operation.”

Molina’s efforts to seek a settlement “will be analyzed,” the CVM said in a statement. “If accepted, the case can be closed. If rejected, the case continues for trial,” it added.

In another high-profile deal this past week, Marfrig bought a 24% stake in poultry and pork processor BRF SA in what Molina said was a passive investment, without board representation. (Reporting by Gabriel Stargardter; Editing by Leslie Adler)