From Ngozi Onyeakusi, Lagos
The Nigerian Stock Exchange (“NSE”) announced the expulsion of Gosord Securities Limited (“Gosord”) and Lakesworth Investment & Securities Limited (“Lakesworth”), two dealing members of NSE and the revocation of their dealing licenses for regulatory infractions involving unauthorized sale of clients’ shares contrary to the Rules and Regulations Governing Dealing Members of The Nigerian Stock Exchange.
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 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”).
Speaking on the development, the Head, Legal and Regulation Division, Ms. Tinuade Awe said “NSE is committed to restoring investor confidence in the Nigerian capital market. 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 explained 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.
NSE received several complaints of unauthorized 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 unauthorized sales of clients’ shares; 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); and Gosord’s conduct was dishonorable, 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).