SAO PAULO, April 26 (Reuters) - Brazil's securities regulator CVM rejected a settlement with the former head of defense for planemaker Embraer SA, citing the severity of corruption allegations related to a $92 million deal with the Dominican Republic.
Orlando José Ferreira Neto, who ran the defense unit until 2010, had proposed a settlement of 300,000 reais ($85,000) after a CVM investigation showed he was likely responsible for $3.52 million in alleged bribes to a Dominican official, the regulator said in a Tuesday statement.
The Dominican armed forces eventually signed a deal for eight Super Tucano light attack planes, Embraer's top-selling military aircraft, with deliveries beginning in December 2009.
In 2010 the U.S. Department of Justice and the U.S. Securities and Exchange Commission launched a corruption investigation into Embraer's sales practices in three foreign countries.
Embraer opened an internal investigation and tightened its compliance standards, but has declined to discuss specific allegations. In May 2015 the company said it had entered talks with U.S. officials aimed at a resolution that could involve sanctions. Embraer declined to comment on the CVM statement.
Lawyers for the former executive did not immediately respond to a request for comment. ($1 = 3.52 Brazilian reais) (Reporting by Brad Haynes and Cesar Bianconi; editing by Andrew Hay)