Insider Trading and the Culpability of Corporate Officers Under Nigerian Law

Abstract

It is no gainsaying that the taking of advantage of information that the other party could not obtain, is as old as human nature; admittedly, man is naturally structured to think of protecting his interest first. Consequently, the regulation of insider dealing has and will no doubt continue to throw up a host of issues. The overall aim of this paper was to examine insider trading and culpability of corporate officers under Nigerian laws. The paper employed the doctrinal methodology. The findings revealed that both the Investment and Securities Act of 2007, the Securities and Exchange Commission Rules regard insider trading as a criminal offence and though Companies and Allied Matters Act, as amended in 2020 was silent about it, its sections 279,280 and 282 which deal with the fiducial duties of company directors could be relied upon when bringing charges of insider trading against anyone. However, the sad reality is that there have been no celebrated or known cases of conviction or punishment for the offence, since the introduction of the Investment and Securities Act. The paper concluded that suspicion amongst shareholders as to transparency of directors and officers of companies’ vis-à-vis handling price sensitive information of companies has generated the upsurge of insider trading regulations. Thus, the paper recommended that adequate enforcement mechanism should be implemented by the Nigerian government because it will be futile having rules that are not enforced.

 

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