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Brazil's BRF sued in U.S. after ex-CEO arrest, food safety probe

NEW YORK, March 13 (Reuters) - Brazil's BRF SA
has been sued in the United States by a shareholder who accused
the world's largest poultry exporter of concealing its
involvement in food safety fraud, culminating in the arrest of a
former chief executive officer.

A complaint was filed on Monday night in the U.S. District
Court in Manhattan on behalf of holders of BRF's American
Depositary Receipts from April 4, 2013 to March 2, 2018, and
seeks to let them sue as a group in a class action.

The plaintiff, Ryo Nakamura, claimed that BRF, former CEO
Pedro Faria and other officials artificially inflated the Sao
Paulo-based company's share price by misleading shareholders
about its operations and compliance practices.

Nakamura said this included the payment of bribes to
regulators and politicians to conceal unsanitary practices at
BRF's meatpacking plants, and that BRF's share price fell as
news of the probe known as "Operation Weak Flesh" came to light.

BRF's ADRs closed at $7.59 on March 5, down 19 percent in
one day and 51 percent from early October, after Faria was
arrested and a Brazilian judge accused BRF officials of covering
up possible food contamination.

The lawsuit seeks unspecified damages.

BRF had no immediate comment on Tuesday on behalf of the

It is common in the United States for shareholders to file
securities fraud lawsuits after the revelation of alleged
wrongful conduct caused a company's stock price to decline.

Non-U.S. companies such as BRF have enjoyed a partial shield
from such lawsuits since the U.S. Supreme Court in 2010 made it
harder to sue over securities sold or listed outside the United

The case is Nakamura v BRF SA et al, U.S. District Court,
Southern District of New York, No. 18-02213.
(Reporting by Jonathan Stempel in New York and Ana Mano in Sao
Editing by Susan Thomas)

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