(Adds details of the proposed deal)
By Carolina Mandl
SAO PAULO, Sept 26 (Reuters) - Brazilian securities regulator CVM said on Wednesday it had rejected a settlement with meatpacker JBS SA and major shareholders in an insider trading case because of the severity of the allegations in the administrative proceedings.
Wesley and Joeslery Batista, the largest JBS shareholders, were arrested in September last year and jailed on charges of insider trading.
The proposed settlement involved JBS, Batista holding company J&F Participações SA and its shareholders, pulp maker Eldorado Brasil Celulose SA and former JBS executives.
Altogether, the parties involved offered to pay 184.5 million reais ($45.4 million) to end the proceedings.
In a separate case regarding the late disclosure of plans for an initial public offering of JBS Foods International BV, CVM agreed to a deal with JBS shareholders and former executives.
Shares of JBS were up 1.72 percent in early trade, at 9.49 reais, outperforming the benchmark Bovespa stock index.
$1 = 4.06 reais Reporting by Carolina Mandl Editing by Chizu Nomiyama and Steve Orlofsky