November 14, 2014 – The Nigerian Stock Exchange (“NSE”) has expelled two security companies from trading on the floor of the exchange.
They are Gosord Securities Limited (“Gosord”) and Lakesworth Investment & Securities Limited (“Lakesworth”).
Their licenses were also revoked by the NSE 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”)”NSE said in a statement.
Speaking on the development, 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 said.
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.
She said the 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)”, she said.
She added N also SE received one complaint of unauthorized sales of a client’s shares against Lakesworth.
“The National Council found that: Lakesworth breached Article 59(v) of the Rules and Regulations Governing Dealing Members of The Exchange by engaging in unauthorized sales of a client’s shares; Lakesworth failed to buy back the client’s shares and resolve all complaints against it, as directed by the Disciplinary Committee (which decision was approved by the National Council); and Lakesworth’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)”, she said adding that the expulsions take immediate effect and that all rights, incidences and privileges of membership automatically cease.
“ The affected firms have been duly notified. The general public should not deal with the expelled firms in relation to any transactions on NSE. 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. Investors or clients of either of the two 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 unresolved complaints against Gosord which were either brought to The Exchange by complainants or referred to The Exchange by the Securities and Exchange Commission have been referred to the Investor Protection Fund”, she said.
