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Venezuela Charges 10 Brokers for Illegal Currency Market Trading

Ten directors of Venezuelan brokerages who were arrested last year on suspicion of participating in a parallel currency market have been formally charged, the Venezuelan attorney general’s office said in a statement today.

Four directors of Econoinvest Casa de Bolsa CA, formerly Venezuela’s largest brokerage, were accused of illegally selling foreign currency and conspiracy, the statement said. Directors from Positiva Sociedad de Corretaje, Venevalores Casa de Bolsa, Multinvest Casa de Bolsa and Banvalor Casa de Bolsa were also charged. All the brokerages have since been shut down by the government.

President Hugo Chavez stepped up currency controls last year by shutting down an unregulated market in which brokerages obtained foreign currency for importers by swapping bonds for dollars. He accused the bond houses of speculation and stoking inflation after the bolivar slid to a record low of 8.2 bolivars per dollar in May 2010.

Chavez’s government sets an official exchange rate of 4.3 bolivars per dollar while permitting some dollar purchases at 5.3 per dollar through a central bank-administered market set up last year to replace the parallel market.

To contact the reporter on this story: Charlie Devereux in Caracas at cdevereux3@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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