By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-The Nigerian Stock Exchange (NSE) on Monday said it has expelled two (2) Dealing Member Firms and revoked their operating licenses.
A statement from The Exchange said the two (2) Dealing Member Firms Gosord Securities Limited (“Gosord”) and Lakesworth Investment & Securities Limited (“Lakesworth”), had their licenses revoked for regulatory infractions involving unauthorised sale of clients’ shares contrary to the rules and regulations governing Dealing Members of the Nigerian bourse.
“In line with its zero tolerance policy on regulatory infractions, NSE stated that its National Council after carefully considering the documents relating to each firm and giving each firm an opportunity to be heard reached the decision to expel both Firms and revoke their dealing licenses” the NSE said.
According to the Nigeria’s Exchange, the National Council acted under powers conferred on it by the Memorandum and Articles of Association of The Exchange (“MEMART”) and the rules and regulations governing Dealing Members (“the regulations”).
Tinuade Awe, head, legal and regulation Division at the NSE while speaking on the development said The Exchange is committed to restoring investor confidence in the Nigerian capital market (NCM). “NSE will not hesitate to bring the full weight of its regulatory powers to bear on any Dealing Member that commits regulatory infractions and does not take steps to address them as appropriate even after being given sufficient time to do so,” she said.
Awe affirmed that of all the penalties, expulsion and revocation of dealing license is usually viewed as a last resort where a Dealing Member fails to engage in conduct to rectify wrong doing or comply with the directives of the National Council.
The NSE received several complaints of unauthorised sale of clients’ shares against Gosord.
The National Council found that Gosord breached article 59(v) of the rules and regulations governing Dealing Members of NSE by engaging in unauthorised sales of clients’ shares.
Also, the NSE said Gosord failed to buy back clients’ shares and resolve all complaints against it, as directed by the Disciplinary Committee which decision was approved by the National Council.
The NSE said also, Gosord’s conduct was dishonourable, disgraceful, unprofessional and detrimental to the interests of The Exchange NSE by destroying investors’ confidence in the market and eroding the goal of the nation’s stock exchange to operate a fair, transparent and orderly market.
Similarly, the NSE affirmed it received one complaint of unauthorised sales of a client’s shares against Lakesworth.
It further affirmed the National Council found that Lakesworth breached Article 59(v) of the rules and regulations governing Dealing Members of The Exchange by engaging in unauthorised sales of a client’s shares.
Again, the NSE said Lakesworth failed to buy back the client’s shares and resolve all complaints against it, as directed by the Disciplinary Committee also whose decision was approved by the National Council.
“Lakesworth’s conduct was dishonourable, disgraceful, unprofessional and detrimental to the interests of NSE by destroying investors’ confidence in the market and eroding the goal of NSE to operate a fair, transparent and orderly market,” the NSE added.
The Nigeria’s Exchange further affirmed that the expulsions take immediate effect and all rights, incidences and privileges of membership automatically cease. “The affected firms have been duly notified,” the NSE said.
However, the NSE warns that the general public should not deal with the expelled Firms in relation to any transactions on at The Exchange.
“Investors who hold stockbroking accounts in Gosord or Lakesworth should transfer their stocks to any active licensed stockbroking firm that is a Dealing Member of NSE. A list of active Dealing Members can be found on The Exchange’s website at www.nse.com.ng,” the NSE said.
The NSE also advised that investors or clients of either of the two (2) expelled Firms who may have deposited funds or securities such as share certificates with Gosord or Lakesworth are advised to go and collect such assets directly from the expelled firm.
The Exchanged said unresolved complaints against Gosord which were either brought by complainants or referred to The Exchange by the Securities and Exchange Commission (SEC) have been referred to the Investor Protection Fund (IPF).
“NSE is a Self-Regulatory Organisation with over 250 listed securities and 222 active Dealing Members. NSE operates a fair, orderly and transparent market that brings together the best of African enterprises, and the local and global investor communities. The Nigerian bourse is poised to champion the acceleration of Africa’s economic development, and to become “the Gateway to African Markets” the statement affirmed.
