FILE PHOTO: Roberto Castello Branco, the new CEO of Brazil’s state-run oil company Petrobras, delivers a speech at a ceremony marking his taking over the firm, in Rio de Janeiro, Brazil January 3, 2019. REUTERS/Sergio Moraes
January 15, 2019
RIO DE JANEIRO (Reuters) – One of three new board members nominated by the Brazilian government to sit on the board of state-run oil company Petroleo Brasileiro SA <PETR4.SA> was previously fined by securities regulator CVM for insider trading, according to documents seen by Reuters.
The disclosure raises tough questions for new far-right President Jair Bolsonaro and Petrobras Chief Executive Roberto Castello Branco, who have vowed to end years of graft involving the oil company and Brazil’s political class.
Nominee John Forman was fined 338,500 reais ($91,540) by the CVM in 2016 for insider trading, according to the documents seen by Reuters. The news was first reported by newspaper Valor Economico, which said the sentence did not bar him from sitting on the boards of public companies.
Forman and Petrobras, as the company is known, did not immediately respond to requests for comment.
Forman, who has appealed the ruling unsuccessfully so far, has not paid the fine. In a statement, the CVM said it “would adopt the necessary measures to receive payment of the outstanding amount.”
Forman, a former director of national oil regulator ANP, is one of three nominees that the government wants to sit on the board of the oil firm. The nominations come amid accusations that Castello Branco has been pushing to oust other board members.
Forman was fined for the sale of shares in HRT Participações em Petróleo, where he used to work. The CVM found that Forman was involved in moving shares ahead of the publication of a regulatory filing about a development in an oil exploration project in Namibia.
Forman told Valor that the dispute with CVM had been settled, but did not give any further details. He confirmed to the paper that he had not paid the fine.
(Reporting by Ana Paula Ragazzi and Gabriel Stargardter; Editing by Peter Cooney)