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The delay in approval of the draft rules for the implementation of the Investors Protection Fund (IPF) by the Securities and Exchange Commission (SEC) has been a stumbling block to compensation of investors, who fell victim of unscrupulous dealings by some registered stockbrokers.
Recently, a group of investors lodged complaints with the NSE, demanding their money trapped in one of the stockbroking firms suspended by the Exchange. The Exchange, however, told them that their complaints would have to wait until SEC approves the modalities for the implementation of the IPF.
The group, which identified itself as Retirees from Delta Steel Company Ltd, Warri Delta State, stated in their complaint to Investors Forum, “ We all gave our share certificates to our stockbroker, Securities Solution Ltd (Member of The Nigerian Stock Exchange), which they verified with our CSCS Account in 2008 and sometimes in Jan., 2012.
We mandated them to sell some of our shares and pay the proceeds to our bank accounts; we waited for payment and they never paid and we got to know later that they have been suspended by the Nigeria Stock Exchange for misconduct and wrong practices in February 2012.That is after much pressure to get our money from them.
“We wrote NSE with attention to Mr. Adebisi Onipede, Head Stockbroker/Dealer Regulation and forwarded the letter to the NSE head office in Marina, Lagos. In the said letter, we informed them about what happened and how our money is yet to be paid by SECURITIES SOLUTION LTD, after selling our shares. The NSE replied and told us in a letter that they are still working on it and they did promised us they are going to do something about it.
But till date, they are yet to resolve the matter and the information we heard was that NSE Lagos had frozen the account of the stockbroking firm concerned, Till date, nothing meaningful has been put together by NSE to pay us since the money is in their custody and they are aware the money is in their account till date.” In its response to investigation by Investors Forum, NSE stated “We acknowledge receipt of your email with respect to the above subject matter. Unfortunately, your complaint has remained unresolved because Securities Solution Limited (SSL) is currently on suspension and has been in an inactive capacity since April 2012.
The firm is currently before the Disciplinary Committee of the Council of The Exchange for their consideration. In the interim, please be informed that the Board of Trustees of the Investors Protection Fund (IPF) of the Exchange has recently been constituted and is currently considering the modalities for the operation of the Fund regarding compensation to investors, who suffered losses in the capital market.
Be assured that your complaint will be promptly resolved when the Board concludes on these modalities. The Exchange appreciates your concerns and patience in our bid to get a resolution to your complaint. Please be assured that we take all complaints from the investing public seriously and will do all within our capacity to ensure that your complaint is resolved.”