SEC probes stockbroking firm over shares fraud

Securities and Exchange Commission (SEC)

Securities and Exchange Commission (SEC) has launched investigation into alleged multi-million Naira shares fraud involving a stockbroking firm, WT Securities Limited, in another high-profile case after the apex capital market regulator indicted and banned two BGL companies from the capital market.

In a preliminary indictment charge, SEC, at the weekend, alleged that its preliminary investigation indicated that WT Securities Limited engaged in fraudulent sale and mismanagement of clients’ shares, valued at about N254 million.

According to the apex capital market regulator, WT Securities Limited was alleged to have mismanaged the investment portfolio of Chief Opral Mason Benson valued at N185.20 million and also sold 500,000 shares of Nigerian Breweries belonging to one Ngozi Oyekwere Nwachuku without the authorisation of the client. The Nigerian Breweries’ shares are currently valued at about N68.5 million.

“A preliminary investigation carried out by the Commission revealed that WT Securities Ltd sold the complainants shares without authority and management of the Commission has directed that the firm, its directors and sponsored individuals be invited to a meeting to explain their roles in the transaction,” SEC stated in the preliminary indictment charge.

With the preliminary indictment, the directors and officials of WT Securities Ltd are expected to appear before the internal disciplinary panel of the apex capital market regulator tomorrow to “show cause why they should not be sanctioned for violating the provisions of Rules 43 and 182A (1), (3) and (5) of the SEC Rules and Regulations”.

SEC, two weeks ago, withdrew and cancelled the registration of BGL Securities Limited and BGL Asset Management Limited after the Administrative Proceedings Committee (APC) found the firms and their operators guilty in a N2.2 billion asset management case.

The APC, the adjudicatory arm of SEC, also banned key executives and management staff of BGL from the capital market for various numbers of years. However, BGL could appeal the decisions to the Investment and Securities Tribunal (IST).

The APC found the two firms and their executives guilty of failure to honour N2.2 billion investment agreements in breach of extant capital market rules. The group managing director of BGL Group, Mr. Albert Okumagba and his deputy Mr. Chibundu Edozie were fined N100, 000 each and were banned for 20 years.

The APC stated that the firms and their executives “engaged in acts capable of adversely affecting the investing public’s image of, and confidence in the capital market”.

Besides, the indictment also referred the firms and the officials to the law enforcement agencies noting that “pursuant to Section 304 of the Investments and Securities Act 2007 all information on possible criminality in this matter be and is hereby referred to the appropriate law enforcement agencies and the Enforcement Department of the Commission shall follow up and ensure that the matter is brought to a logical conclusion”.

Besides the cancellation of their registrations, BGL Securities was slammed with total fine of N22 million while BGL Asset Management was slammed with N5 million. Also, Mr. Peter Adebola was banned for five years, Joseph Ashley-Osuzoka was banned for four years with a fine of N100,000, Victor Obire was banned for three years with a fine of N100,000; Joshua Sesan Adetiloye was banned for one year; Nkechi Azubuike, Adekule Alli, Mohan Lalchandani, Anthony Nwozor and Oluwo Oluwale were all banned for one year and fined N100,000 each while Ande Ewubare, Victor Inyang, Hilary Eludu, Ehime Alofoje and Ofem Mbui Omni were slammed with two-year ban with a fine of N100,000 each.