Nigeria's Securities and Exchange Commission's Administrative Proceedings Committee has decided, in the matter of Rivers State Ministry of Finance & 31 Others v BGL Plc & 31 Others, to ban two directors of investment firm BGL from the securities business for life.

One director, according to the press, is thought to be Albert Okumagba, the BGL Group's managing director, the other being his deputy MD, Mr Chibundu Edozie. Both were fined 100,000 naira (US$328) each and neither will be allowed to engage in capital market activities again. Both are also subject to a life ban from holding directorships in any public company in Nigeria.

The case against the accused

The accusation, as the name of the case suggests, was that they broke Nigeria's capital market laws and rules, thereby causing 31 investors (in fact, according to the SEC notice, there is also a 32nd) to lose 5.77 billion (US$19 million).

Investigations revealed that the duo had, through other company employees, broken the Investment and Securities Act 2007 and the SEC Rules and Regulations. Among the accusations, summarised in a public notice of 7 January 2016, they were accused of:

• perforing a capital market function without due registration;
• promoting and marketing products not registered by the SEC;
• failure/refusal to resolve clients’ complaints;
• failure to file statutory returns; and
• furnishing the SEC with false and misleading information.

The APC sat on 8 December 2016 to hear the matter. In the course of the hearing, testimonies and documentary evidence were tendered by various parties. The SEC APC then reached a final decision that the relevant authority approved.

The SEC's recent reorganisation

Just last month, the SEC moved its inspectorate division to its zonal office in Lagos. This is part of an attempt to beef up its supervisory efforts towards registered capital market operators, 90% of whom are in Lagos. Some staff will stay at the head office in Abuja to handle some Northern operators. It has revamped its registration process and is so happy with the result that its site crows about how "there is no doubt that the Commission’s revamped registration process has ensured the admission of only persons with excellent credentials to the market." To cap its efforts, it is moving its registration division to the Lagos office also. Last but not least in its drive to reorganise, the SEC has merged its Fund Management Division (Investment Management Department) with the Inspectorate Division (Monitoring Department) as both performed similar functions.