The head of Colombian financial regulator Superfinanciera, Cesar Prado Villegas, recently resigned in the wake of the collapse of pyramid schemes estimated to have swindled investors out of as much as $1 billion.  Roberto Borras, director of the finance ministry’s regulatory unit, has been named to replace Prado on an interim basis.

It is estimated that more than 3 million Colombians invested in the schemes offered by unlicensed investment companies, which promised returns as high as 150%.  After collecting the “investments,” the companies began disappearing earlier this month.  Government officials and regulators have been criticized for not shutting down the schemes and for not being prepared for the schemes’ collapse, which led last week to widespread rioting and looting of the companies’ former offices.  The Colombian government has declared a state of emergency and seized 60 branch offices of one of the pyramid scheme companies.

Government officials and commentators expressed concern that the Colombian economy, already negatively impacted by the global credit crisis, will further contract because of decreased consumer spending due to losses in the schemes.

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