Shares of Banco BTG Pactual SA fell on Oct. 3 after federal police in Brazil said they raided the investment bank's São Paulo headquarters as part of an investigation into the alleged leaking of central bank monetary policy decisions between 2010 and 2012, Reuters reported.
Prosecutors are probing corruption, insider trading and money laundering allegations in an investigation that also involves former senior officials from Banco Central do Brasil and Brazil's finance ministry.
A BTG Pactual investment fund reaped "extraordinary" profits using the leaked rate decisions, prosecutors said in a statement without naming the fund or the officials under investigation. They initiated the probe following plea deal testimony delivered by former Finance Minister Antonio Palocci.
BTG Pactual shares were down roughly 2.9% around midday Oct. 3 after having tumbled up to 10% earlier in the day, Reuters reported.
In a statement denying any wrongdoing, BTG Pactual said the probe was related to an investment fund named Bintang FIM, which was managed by an unnamed client who was the sole investor in it.
The client was "a professional trader" but "was never an employee of BTG Pactual, or had otherwise any professional relationship with the bank or any of its shareholders," the company said.
"BTG Pactual performed exclusively fund administration services on behalf of the fund, and never had any discretionary portfolio management powers, nor any investment interests. This fund was terminated in 2013," BTG Pactual added.
In August, federal police raided the investment bank's headquarters and addresses belonging to founder and former CEO Andre Esteves as part of the so-called Lava Jato corruption probe. The bank denied wrongdoing in the previous case too, although its share price took a substantial hit.
Esteves was arrested in 2015 in the Lava Jato probe but was later acquitted. He is now seeking central bank approval to reestablish his controlling stake in BTG Pactual.
