SAO PAULO, April 11 (Reuters) - Brazil's security regulator believes that tycoon Eike Batista engaged in insider trading, newspaper Valor Economico reported on Friday, saying his oil company waited 10 months to inform shareholders that four oil fields were not commercially viable.
The former billionaire was selling shares of Oleo and Gas Participações SA, then known as OGX, and a sister company at the same time as he encouraged investors to buy more stock and touted the fields' potential on Twitter, according to Valor, which had access to the CVM regulator's investigation.
OGX said the Tubarao Azul, Tubarao Tigre, Tubarao Gato and Tubarao Areia fields were not commercially viable in a filing on July 1, 2013, kicking off the long decline of Batista's EBX group in what is now considered Brazil's largest corporate meltdown.
The CVM investigation showed Batista, whose companies are now mostly in bankruptcy proceedings or have been sold, had access to information that was not communicated to the market when he sold shares of OGX and shipbuilder OSX prior to July 1, allegedly violating Brazil's rules on using privileged information, according to the paper.
The Valor article said Batista and OGX executives had suspected the recoverable oil in the fields was smaller than initially expected since 2011.
In September of 2012, board members were presented with new estimates that confirmed drilling the areas would not yield a profit under any scenario, Valor said, and that Batista subsequently engaged in insider trading.
Valor did not say what punishment Brazilian could face. Under Brazilian law, stock violations can carry administrative and criminal penalties.
OGX shares have lost most of their value since the company went public in 2008 and are no longer a component of Brazil's Bovespa index. OSX is entirely reliant on OGX for revenue.
Representatives for Batista, Oleo and Gas, and the CVM regulator did not immediately respond to request for comment.
(Reporting by Caroline Stauffer, Jeb Blount and Marcela Ayres; Editing by Steve Orlofsky)