Regulatory Challenges for Detecting and Punishing Economic Crime in Chile

Abstract

Recent investigative steps by the Public Prosecutor's Office into large-scale pyramid schemes, also known as Ponzi schemes, have revived an old discussion about the supervisory role of the financial regulator. The debate sharpens in the face of an evident shortage of human and financial resources to confront these rent-seeking malpractices, where the regulator's role is cut short by the absence of criminal provisions penalizing both the supply side (exorbitant returns) and the demand side (investors hungry for easy money). This article seeks to explain some of the underlying problems that foster economic crime.