Former Billionaire Eike Batista Convicted for Insider Trading

(Bloomberg) -- Eike Batista, formerly Brazil’s richest man, was sentenced to an additional eight years and seven months of prison time on Monday for insider trading.

Batista, 62, had already been convicted for paying $16.6 million to get government contracts as part of a sprawling corruption probe known as Carwash and sentenced to 30 years, which he is serving under house arrest.

Batista’s lawyer Fernando Martins said in an email that the ruling will be appealed.

Monday’s decision is the first of three cases against Batista for financial crimes, federal prosecutors said in a press release. He was convicted of selling shares in his shipbuilding and logistics company OSX before announcing changes to the company’s business plan that included austerity measures, the prosecutors said.

Going to jail over insider trading is a rare event in Brazil. When Wesley Batista, then-chief executive officer of meat producer JBS SA (no relation no Eike Batista) was arrested on allegations of insider trading in 2017, Police Chief Rodrigo Campos Costa said in a press conference he believed it was the first such arrest ever made.

Batista’s commodities and logistics empire raised his personal fortune to more than $30 billion at the start of the decade, turning him into one of the wealthiest people in the world. Those riches evaporated after his group of start ups went bust under a mountain of debt and insider trading investigations. He gained the rare distinction of “negative billionaire” in 2015 when his net worth sank to more than $1 billion in debt.

The so-called Carwash probe started in 2014 and has resulted in convictions of high-profile politicians and business leaders including former President Luiz Inacio Lula da Silva, whose stars rose during the commodities boom of the previous decade. The investigation raised awareness of endemic corruption and contributed to the election of President Jair Bolsonaro, who campaigned on a law and order platform.

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