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By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – Effects of the Brazilian federal police’s investigation into tainted meat, dubbed Operação Carne Fraca (Operation Weak Flesh) are being felt abroad as an United States law firm, that works for investors’ rights announced it would be filing a class action lawsuit against JBS on behalf of stockholders.

Brazil, Brasilia, Health inspectors retrieving meat from companies involved in the Carne Fraca Operation, Rio de Janeiro, Brzil News
Health inspectors retrieving meat from companies involved in the Carne Fraca Operation, photo by Denio Simoes/Agencia Brasilia.

Rosen Law Firm will be representing a group of foreign JBS investors who the law firm claims were hurt by the omission of information and disclosure of statements given by the company, they deemed misleading.

According to the Rosen lawyers “JBS executives bribed regulators and politicians to subvert food inspections of its plants and overlook unsanitary practices such as processing rotten meat and running plants with traces of salmonella”, leading the company shares traded on the NY Stock Exchange to suffer significantly

The press release about the class action suit to be filed also notes that the ‘defendants’ statements about JBS’s business, operations and prospects were materially false and misleading and/or lacked a reasonable bases at all relevant times’.

According to lawyers questioned by Brazilian local media, the class lawsuit against JBS was already expected. They say a similar class action may be brought against another meat production giant, BRF, also cited in the investigations.

“Especially because the financial result of the companies was impacted by these fraudulent operations,” Jose Nantala Freire, specialist in international law and compliance told government news sources. According to Freire the same thing occurred in 2014 with Petrobras in the Operação Lava Jato (Carwash) scandal.

On March 17, 2017, Brazilian federal police raided the offices of several meatpackers after a two-year investigation into alleged bribery of regulators to subvert inspections of their plants and overlook unsanitary practices.

Among those being investigated are two of the world’s largest meat producing companies, JBS and BRF. Police arrested two JBS employees, and twenty public officials.

Due to the operation, says Rosen Law Firm, JBS shares fell by US$0.71 per share or over 9.2 percent in a period of a few hours, to close at US$6.96 per share on that day and hurt investors.

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