May 9, 2014 11:47 a.m. ET

SÃO PAULO—Brazilian prosecutors are investigating embattled Brazilian businessmanEike Batista for earning some 124 million Brazilian reais ($57 million) by using inside information on the performance of his oil company, according to court documents.

The allegation led a Brazilian judge in Rio de Janeiro on May 6 to seize assets of Mr. Batista worth 122 million Brazilian reais.

Brazilian public prosecutors are examining whether, between May and June last year, Mr. Batista sold shares in his oil company, Óleo e Gás Participações SAOGXP3.BR 0.00% (formerly OGX Petróleo e Gás Participações SA) before damaging information became public, according to the document.

The prosecutors believe that Mr. Batista knew that there were doubts about the economic viability of three oil fields: Tubarão Tigre, Tubarão Gato and Tubarão Areia. Before that information became public, he sold 126 million OGX shares earning 197 million reais, according to the documents. Had he waited until after the news became public, he would have earned a maximum of 73.5 million reais, according to the court document.

On Thursday, Mr. Batista in a statement confirmed he had been informed of the court decision and that 122 million Brazilian reais of his assets deposited at Brazilian investment bank Banco BTG Pactual SA BBTG11.BR +0.27% have been frozen.

The former billionaire denied any wrongdoing and intends to appeal the decision, according to the statement. In a recent interview, Mr. Batista said all his sales of shares were properly registered.

The businessman, once Brazil’s richest person, is under investigation for alleged financial crimes connected to the oil company, which filed for bankruptcy last year.