FILE PHOTO: Brazil's state-run Petrobras oil company headquarters is pictured in Rio de Janeiro, Brazil December 5, 2018. REUTERS/Sergio Moraes

RIO DE JANEIRO (Reuters) - One of three new board members nominated by Brazil's government to sit on the board of state-run oil company Petroleo Brasileiro SA PETR4.SA was fined in 2016 by securities regulator CVM for insider trading, according to CVM documents on the ruling seen by Reuters.

The disclosure raises tough questions for new far-right President Jair Bolsonaro and Petrobras Chief Executive Roberto Castello Branco, who have vowed to end years of graft involving the oil company and Brazil’s political class.

Nominee John Forman was fined 338,500 reais ($91,540) by the CVM in 2016 for insider trading, according to the ruling documents seen by Reuters. The news was first reported by newspaper Valor Economico, which said the ruling did not bar him from sitting on the boards of public companies.

Forman, who is appealing the ruling in federal court, has not paid the fine. He told Reuters that CVM had violated the law and ignored evidence of his innocence.

In a statement, CVM said it “would adopt the necessary measures to receive payment of the outstanding amount.”

Petrobras, as the company is known, did not immediately respond to requests for comment.

Forman, a former director of national oil regulator ANP, is one of three nominees that the government wants to sit on the board of the oil firm. The nominations come amid accusations that Castello Branco has been pushing to oust other board members.

Forman was fined for the sale of shares in HRT Participações em Petróleo, where he used to work. CVM found that Forman was involved in moving shares ahead of the publication of a regulatory filing about a development in an oil exploration project in Namibia.