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Published On: Tue, May 28th, 2019

SEC warns Market Operators against unethical conduct

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By Etuka Sunday

The Securities and Exchange Commission, SEC, has warned some Operators in the Capital market to desist from unethical practices that could lead to strict regulatory actions in accordance with the rules and regulations of the Commission
The Commission in a statement on Monday, said its attention has been drawn to an emerging trend of unethical conduct by Brokers, Issuing Houses/Book Runners and other Receiving Agents in primary and secondary market transactions.
The SEC said the concerned operators carry out their activities by inducing investment through the sharing of brokerage fees or receiving agents commission with private banking officers, asset/fund managers, PFA’s and other institutional investor classes who are not duly registered or recognized by the Commission as being eligible to be paid commission.
According to the SEC, “Notice is hereby issued that only capital market operators duly registered by the Commission are eligible to be paid brokerage fee/receiving agents’ commission and such Operators shall not pay or offer a percentage of the commission earned from services provided in a transaction as an incentive for investment.
“Any capital market operator found to engage in this practice or similar acts shall be subject to strict regulatory actions in accordance with the rules and regulations of the Commission.
The SEC therefore enjoins the public to utilize the Commission’s whistle blowing mechanism to provide information on any known or suspected case for necessary action.

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