(NSE) The Nigerian Stock Exchange has blacklisted no fewer than 33 persons for alleged corruption. They are indicted officials who are deemed unfit to engage in the stock market.
The Nation had in December last year reported that the Exchange had amended its rules to enable it open a “blacklist” for recording corrupt persons. The amendment was approved by the Securities and Exchange Commission (SEC) in December, last year.
A list of persons on the high-profile “blacklist” obtained at the weekend indicated that no fewer than 33 persons have been blacklisted for various crimes ranging from unauthorised sale of clients’ shares, diversion of funds, professional misconduct and aiding and abetting criminal activities.
Those on the “blacklist” include stockbrokers, accountants, directors, compliance officers, registrar and information and technology specialists among others. A breakdown showed that stockbrokers were more than half of the blacklisted persons while compliance officers also featured prominently.
To be included in the “blacklist”, the Exchange must have established a prima facie case and indicted such persons. Any blacklisted person shall no longer be entitled to privileges, services, recognition or access to the Exchange and its facilities. Such a person also shall not be permitted to deal or transact with or be employed by a dealing member or person.
The “blacklist” rule applies to all dealing member, an authorised clerk, an employee or director of a dealing member, a sub-broker, or any other capital market operator.
According to the rules, any person blacklisted by the Exchange may however apply to the Exchange for reinstatement after the expiration of the blacklisting period imposed by the Exchange; or where the blacklisting is not for life, a reasonable period has elapsed where no period is specified by the Exchange.
Any person applying for removal from the blacklisting and reinstatement into the capital market must “provide compelling reasons” in support of his or her application.
The Nation had reported that a formal “Blacklist” was meant to strengthen the hands of the Exchange in its fight against unauthorised sales of investors’ shares and diversion of proceeds by capital market operators.
A check indicated that about 90 per cent of existing blacklisted persons were due to unauthorised sales of client’s shares. Other ranking crime was manipulation of the market or share prices.
The Nation had recently reported that the Economic and Financial Crimes Commission (EFCC) is investigating about 35 fraud cases at the Nigerian capital market.
Although the full details of the cases could not be disclosed due to legal confidentiality and ongoing investigations, a review of the preliminary findings indicated that most cases relate to fraudulent sale of clients’ shares and diversion of clients’ funds, impersonation and false representation of products and services.
The NSE-through its Disciplinary Committee and Securities and Exchange Commission (SEC)-through its Administrative Proceedings Committee (APC) run an active investigative mechanism that seeks to uncover malpractices, sanctions indicted operators and restitutes affected investors. However, both NSE and SEC lack prosecutorial powers.
Capital market authorities had bridged the gap between their investigative powers and prosecutorial powers through Memorandum of Understanding (MoU) with the EFCC, which allows the organisations to collaborate on information sharing, investigation, prosecution and enforcement.
