Brazil's Securities Commission (CVM) condemned businessman Like Batista on Monday (27) and fined him R$536 million (US$133 million) for "insider trading." Eike used privileged information when he traded shares of OGX petroleum.
He also cannot act as an administrator of a publicly-held company for seven years nor serve on a publicly-held company's board. The decision was unanimous and will be sent to the Federal Public Ministry. His defense can contest the 'fine's amount and the length of the penalty.
The CVM investigated Eike after a Folha report in November 2013 showed that the administrators of OGX knew, since July 2012, that the petroleum oil reserves did not amount to what had been shared with the public.
Back then, Eike tweeted to his 1.3 million followers urging shareholders to keep their shares, knowing that the main oil fields of his company were not viable.
"Eike's conduct seriously violates the capital market and smashes investor confidence," said Henrique Machado, director of the CVM and rapporteur for the case. Two other members and the chairman of the CVM followed the rapporteur's vote.
Translated by Kiratiana Freelon