Shareholders call for sanctions against erring stockbrokers

Posted by newsexpress | 13 August 2015 | 3,595 times

Gmail icon

Some shareholders on Wednesday said that the burden on the Investors Protection Fund (IPF) would be stemmed by the levying of appropriate sanctions on erring stockbrokers caught engaging in sharp practices.

They said that their advocacy became imperative following the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE’s) commitment in restoring market-based confidence through the IPF.

The shareholders also said in interviews with the News Agency of Nigeria (NAN) in Lagos that the market regulators should expose erring dealers engaged in sharp practices to boost investors’ confidence.

NAN reports that the shareholders were reacting to the N43.23 million IPF monies paid to 158 investors as a result of defalcation committed by 29 dealing member firms.

National Secretary, Independent Shareholders Association of Nigeria (ISAN), Mr. Adebayo Adeleke said that market regulators should prosecute erring brokers, to reduce malpractice in the market.

Adeleke said that stockbrokers were responsible for the losses incurred by investors and should be punished for such.

He said that the regulators should embrace the name and shame approach, to minimise fraudulent practices at the nation's bourse.

National President, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie called for transparency in the management of the fund.

Okezie said that the exchange should make public the names of the beneficiaries, for transparency and for investors to believe in it.

“As for now, the investment protection fund still remains a mystery because nobody is aware of it and the processes involved.

The investing public has to know who and who benefitted so far from the fund; it is not enough to say we have been paid so much, without letting the investing public know what is really going on at the committee level.”

He said that shareholders needed to be carried along in decision making by the NSE and its management.

NAN reports that the NSE on Aug. 5 announced plans to compensate 158 investors with N42.23 million, under its IPF.

The IPF is a quasi-capital market insurance scheme inaugurated in 2012 for defalcation committed by the NSE-registered dealing member firms.

The fund was also designed to compensate investors’ loses occasioned by bankruptcy, insolvency, negligence or wrongdoing of the stock-broking firms and to boost investors’ confidence in the nation’s bourse.

It addresses defalcation committed by dealing member firm directors, officers, employees or representatives, in relation to securities, money or any property in the course of its business as a dealing member firm.

The NSE in a statement said that the compensation covered pecuniary losses suffered by investors’ following wrongdoing by 29 dealing member firms of the Exchange. (NAN)

•Photo shows NSE Trading Floor

Source: newsexpress

Readers Comments

0 comment(s)

No comments yet. Be the first to post comment.

You may also like...