Exclusive: inside Colombia's Interbolsa collapse

Author: Michael Washburn | Published: 29 Jan 2013

The collapse of Colombia’s biggest brokerage, Interbolsa, has caused a firestorm of litigation, leading some to call for a Volcker Rule in Colombia.

One of the firms representing investors caught-up in the fallout spoke exclusively to IFLR.

A key consequence of the scandal is ongoing disagreement among Colombian lawyers over who is to blame and how effective financial sector regulation can be if the regulators themselves are negligent or corrupt.

When the Interbolsa scandal hit in November, as allegations of misuse of funds, reporting fraud, and accounting fraud came to light and the government announced plans to liquidate the brokerage, one of the first law firms to jump into the fray was Bogota-based Rodriguez-Azuero Abogados.

Once the markets and the general public were aware of what had happened, investors and traders went to the law firm demanding representation through the civil and criminal courts.

While Colombia’s attorney general...