Investigation of the affairs of the Nigerian Stock Exchange

The Securities and Exchange Commission (hereinafter referred to as “SEC”) received allegation which suggest that the affairs of the Nigerian Stock Exchange (hereinafter referred to as “NSE” or “the It  Exchange”) may have been managed in a manner that is detrimental to the interest of the investing public”). These allegations derive principally from two sources that include
(i) the issues raised by a team of SEC Inspectors in a report to SEC
following the annual investigation of’ the NSE carried out between
14 to 18 September 2009; and
(ii) allegations against the NSE received from industry stakeholders in general and notably the former President of the Council
1.2 Based on the gravity of these allegations and the necessary
investigative steps that would be needed to verify the allegations, the allegations requiring further investigation were narrowed down to a little over 20 (twenty), namely:
(a) No evidence of meetings of the committees of the Council
(b) MEMART of NSE was altered by resolution of 11 Nov 2006, the alteration was not approved by the SEC and copy cited was not
certified by CAC;
c) No evidence of disciplinary action taken on the 2,715 complaints (involving the unauthorized sale of shares, withholding of proceeds of sale) reported to the NSE;
d) Lack of effective oversight mechanism of quoted companies/ineffective surveillance and appraisal of the internal structure and operations of dealing members (some members had liquidity ratios of zero and negative values in breach of Article 15(e) and section 32 of the ISA;
e) No evidence/report indicating the existence of a risk assessment
system for members as required by Article 15(d) of the Exchange
Rules;
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