Insider Trading in Nigeria: Definition, Laws, and Actions to Take
By Engr. George Nwogu
The Allegation I made was based on how me and my friends at Business Day Investment Club FUTO, lost money in Bank Shares and what happens the bank shares after IPOs in 2009 and I didn’t say ALL (I said SOME).
What is Insider Trading? Insider trading occurs when individuals with access to unpublished, price-sensitive information about a company use it to trade securities for personal gain. This unethical practice gives an unfair advantage to a few, leaving regular investors at a disadvantage and undermining market integrity.
Laws Criminalizing Insider Trading in Nigeria
- Investment and Securities Act (ISA), 2007: Section 111 explicitly prohibits insider trading, imposing severe penalties, including fines and imprisonment, on offenders.
- Companies and Allied Matters Act (CAMA), 2020: CAMA mandates the disclosure of interests by directors and officers to prevent conflicts of interest and insider dealings.
- Securities and Exchange Commission (SEC) Code of Corporate Governance: SEC monitors trading activities and investigates insider trading cases. Whistleblowing mechanisms are also provided for reporting violations.
What to Do If You Discover Insider Trading
- Gather Evidence: Document suspicious activities, such as unusual trades or access to sensitive information. Include any supporting materials like emails or transaction records.
- Report to Authorities:
- Inform the Organization: If you work for the company involved, report to the compliance officer or legal department, adhering to internal whistleblower policies.
- Seek Legal Advice: Consult a securities lawyer for guidance on the proper steps and your rights.
- Avoid Public Disclosure: Do not expose the issue publicly to avoid legal and procedural complications.
A Legal Personnel has this to say:
In Summary: Without transparency and enforcement, the average investor continues to suffer at the hands of those exploiting insider information. By understanding the laws and taking appropriate action, we can collectively work toward a fairer financial system in Nigeria.
Warm Regards,
COO, BIZVILLE PROJECT MANAGEMENT Limited
#GeorgeNWOGU #Transparency #InsiderTrading #CorporateGovernance #GeorgeNWOGU #Nigeria #BIZVILLEPM 🌐🚀
Motto: Humanity First, then Smart and Green. 🚀
