‘InterBolsa executives should remain free during trial’: Colombia Inspector General

Posted on Mar 28 2014 - 3:57pm by Rico

The Inspector General’s Office requests that three former executives of the now defunct brokerage firm InterBolsa, not be jailed during their trial.

A representative from the Inspector General’s Office requested that the judge refrain from taking “security measures” against the president of Interbolsa, Alvaro de Jesus Tirado, and two other executives, according to La Semana newspaper.

The three executives are being investigated for their role in the collapse of the firm in November 2012. Prosecutors are charging them with unauthorized transactions, conspiracy, and falsifying documents, among other charges.

The defendants have denied the charges against them.

According to the Inspector General’s Office, the prosecution failed to present sufficient evidence to warrant incarceration of the defendants during the trial.

The inspector general did concede that certain “restrictive measures” should be put into effect and that the charged executives “pose a danger to society and could be considered a flight risk.”

MORE: US investigating Colombian stockbrokers for money laundering: Report

Interbolsa operated as Colombia’s largest brokerage firm until November 2012 when the government liquefied the company, after defaulting on $11 million dollar loan.

The scandal erupting from the fall of InterBolsa, came into light after inquiries into the company’s liquidation revealed potentially criminal actions involving top government officials.

A criminal investigation was subsequently launched into an alleged money laundering scheme, where the company used assets owned by investors to collateralize a borrow and buyback scheme with shares of Fabricato, a Colombian textile company.

MORE: Colombia govt launches criminal investigation against InterBolsa

Following the firm’s collapse, Colombia’s Inspector General Office dismissed and banned the country’s financial superintendent from public office for 12 years. The financial superintendent was charged with failing to perform regulatory functions at Interbolsa, which defaulted after a major embezzlement scheme.

Inspector General Office said that the Financial Superintendent, Gerardo Alfredo, held preventative responsibilities that “he did not perform.”

The scandal involving InterBolsa had a widespread impact upon Colombia’s financial world in late 2012. The collapse of the brokerage firm, which accounted for approximately 25% of the country’s stock market, caused the Colombian peso to spike and investor confidence to plummet.

Bancolombia, Colombia’s largest bank, took over the failed wing of InterBolsa soon after, restoring investor confidence and causing the pesto to appreciate 1%.

The governmental agreement that sanctioned Bancolombia’s investment prevented InterBolsa’s liquidity crisis from infecting the rest of the Colombian stock market.



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