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UPDATE 1-Brazil police detain JBS CEO Batista on suspicion of insider trading

(Adds background, quotes)

By Guillermo Parra-Bernal

SAO PAULO, Sept 13 (Reuters) - Brazil's federal police
detained JBS SA Chief Executive Officer Wesley Batista on
Wednesday, as an investigation escalated into the role played by
him and his younger brother in suspected insider trading ahead
of a plea bargain deal with prosecutors.

The brothers' lawyer, Pierpaolo Bottini, and JBS confirmed
media reports of the arrest.

While JBS had no further details, Bottini lashed out at the
detention, calling it "unjust, absurd and regrettable."

Earlier in the day, police issued a preventive arrest order
against both Wesley and Joesley Batista, citing the alleged use
of insider information in financial market dealings ahead of
their May plea deal.

Joesley Batista has been in temporary detention since Sunday
after recordings suggested he tried to take advantage of
prosecutors and conceal details during negotiations that led to
the plea deal. He has strongly denied this.

The insider trading case involving JBS and the
Batistas follows probes by securities markets regulator CVM on
trades both made before a plea deal between the brothers and
prosecutors was announced in mid-May.

The disclosure of their plea bargain testimony, which
involved key politicians, led to Brazil's biggest market selloff
in at least a decade.

According to a person with knowledge of the matter, who
asked for anonymity because of the sensitivity of the issue,
police investigators suspect both brothers gained an unfair
advantage in trading shares of JBS, while helping the company
build abnormal positions in currency futures and forwards in
April and May.

The detention of Wesley Batista comes as his plea deal with
prosecutors is unraveling due to alleged omissions in their plea
bargain testimony. Some minority shareholders seek
his removal from the world's largest meatpacker.

"The Brazilian state is using all means to promote revenge
against those who cooperated with justice," Bottini said in a

The police said two detention orders were also issued
against executives at the Batista family-owned FB Participações
SA and JBS, without elaborating.

The scheme helped "manipulate markets in a way that all
shareholders incurred some of the losses that FB Participações
would have otherwise had to absorb alone," a police statement
(Reporting by Guillermo Parra-Bernal; Additional reporting by
Pedro Fonseca in Rio de Janeiro; Editing by Catherine Evans,
Daniel Flynn and W Simon)

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